Why We Spend So Much

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.

Bob Somerby wants to know why the media isn’t a wee bit more interested in why the United States pays far more per person for medical care than other rich countries.  Here’s the rough answer:

  • We pay our doctors about 50% more than most comparable countries.
  • We pay more than twice as much for prescription drugs, despite the fact that we use less of them than most other countries.
  • Administration costs are about 7x what most countries pay.
  • We perform about 50% more diagnostic procedures than other countries and we pay as much as 5x more per procedure.

Underlying all this is the largely private, profit-driven nature of American medicine, but regardless of how you feel about that, the main lesson here is how hard it would be to seriously bring these costs down.  We can jabber all we want about incentives and greed and systemic waste, but the bottom line is that if we want to do anything more than nip around the edges, we’d have to pay doctors and nurses less, pay pharmaceutical companies less, pay insurance companies less (or get rid of them entirely), pay hospitals less, and pay device makers less.  That’s a lot of very rich and powerful interests who will fight to the death to prevent any serious cost cutting, and it’s why Obama and the Democrats in Congress have largely chosen to buy them off instead.

If you’re curious about this in slightly more detail, the chart on the right comes from a McKinsey Global Institute study of healthcare costs.  (An older but more interactive version is here.)  Healthcare spending tends to be higher in richer countries, and since the U.S. is a very rich country it’s unsurprising that we spend a lot on healthcare.  However, even when you account for that, McKinsey figures that we still spend about $2,000 more per person than we should, a total of about $650 billion.  The chart shows where this extra expense comes from: the dark blue areas are places where we spend more than expected and the orange areas show where we spend less than expected.

No matter how you slice the healthcare pie, though, compared to other rich countries we spend far more, cover fewer people, get hassled a lot more, and don’t get much better outcomes.  Unfortunately, there are a lot of people who profit handsomely from this state of affairs, so it’s not likely to change radically anytime soon.  Baby steps, my friends, baby steps.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate