4 Critical Factors that Make Healthcare Prohibitively Expensive


When compared to other countries, Americans spend significantly more per year on health care. This would be understandable if Americans were receiving better care, but this is not the case. While everyone agrees something needs to be done to decrease healthcare expenses, there is disagreement on where to focus price-reducing efforts. The following are the leading sources of high healthcare expenses in the United States:

  1. Higher cost of doing business. Part of this disparity is the increased cost of care in the United States. While Dutch citizens can expect to spend a little over $5200 per year on healthcare, Americans will shell out $9400 for similar services and procedures. When it comes to high-volume surgical procedures, Americans can expect to spend 2-6 times the amount that other countries do. Some of the most common and most expensive procedures include C-sections, knee and hip replacements, and coronary artery bypasses.
  2. Higher volume of procedures. Although healthcare costs in America are notoriously high, high prices aren’t the only source of the expenses. Certain procedures occur with more regularity in the United States than they do in other countries. For example, surgeons perform twice as many C-section in the US than they do in the Netherlands. This breaks down to $62 per capita in America compared to $9 in the Netherlands. An excess of medical imaging also affects prices as Americans receive more MRIs and CT scans at much high costs ($220 per capita in the US versus $23 in the Netherlands).
  3. Administrative costs. Paperwork and other clerical tasks are a necessary part of running a healthcare business. However, Americans spend significantly more for it. Accounting costs Americans $752 per capita per year compared to $208 in the Netherlands. Compared to peer countries around the globe, America spends 3-5 times more on medical admin tasks.
  4. Pharmaceutical spending. It’s worth noting pharmaceuticals as a separate entity from medical procedures and services. Americans aren’t receiving a disproportionately higher amount of drugs, but they are paying significantly more to obtain them. Americans spend over $1440 per capita on pharmaceuticals compared to $566 for Swedes.

There are a number of approaches that could reduce healthcare costs in America, but the above four areas will offer the greatest cost savings opportunities. Regulating drug prices, decreasing unnecessary procedures, and limiting superfluous imaging are all possible options.

However, for medical professionals, reducing their administrative costs should be a key focus. This expense drives up costs for patients and eats into a caregiver’s bottom line. If you have concerns about your Florida medical practice, contact the experts at MMA Florida. We can help identify areas of risk that drive up costs as well as methods to reduce them.

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