Healthcare: Where the Money Goes

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Why does healthcare cost so much in the U.S.? Well, we typically rely less on hospital care and more on outpatient care than most countries, so you might expect that we pay less for hospital care and more for outpatient care. But you’d only be half right. Even though we use less hospital care we still pay more for it than most countries. And since we use more outpatient care we pay a lot more for it:

The fact that we’re spending so much on outpatient care isn’t necessarily a bad thing. Same day surgery does cost less in general that longer inpatient stays. But it’s undeniable that the incentives in the system to financially reward quicker and less invasive procedures have increased their use. The financial rewards are much more for outpatient than inpatient care, and the fee-for-service mechanisms of the US encourage the use of more care.

….So here’s our first bit of depressing news. The single biggest contributor to the money we’re spending that’s “extra” is for medical care. It’s not a company or a crook. It’s for actual stuff that we seem to value. I will get into some of the specifics of this in future posts, but the bottom line is that when we talk about cutting spending, we will need to talk about reducing this amount. Especially since, if we were spending so much on care, we should expect to see impressive returns in quality (which we don’t).

The introduction to Aaron’s series on the cost of medical care is here, including links to each post in the series. It’ll be finished up on October 1.

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In "It's Not a Crisis. This Is the New Normal," we explain, as matter-of-factly as we can, what exactly our finances look like, how brutal it is to sustain quality journalism right now, what makes Mother Jones different than most of the news out there, and why support from readers is the only thing that keeps us going. Despite the challenges, we're optimistic we can increase the share of online readers who decide to donate—starting with hitting an ambitious $300,000 goal in just three weeks to make sure we can finish our fiscal year break-even in the coming months.

Please learn more about how Mother Jones works and our 47-year history of doing nonprofit journalism that you don't find elsewhere—and help us do it with a donation if you can. We've already cut expenses and hitting our online goal is critical right now.

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