American Healthcare Costs and Reasons Behind Them

Subject: Healthcare Financing
Pages: 3
Words: 600
Reading time:
3 min
Study level: College

Today, the United States is one of the industrialized countries that spend a lot of money on healthcare. However, it has not been in a position to extend healthcare services to all its citizens. It has been observed that a lot of money is spent on health services per capita as compared to its peer countries. There are various factors that have contributed to the rising health cost in the United States (Herman).

One of these factors is obesity, which is one of the common epidemics in USA today. In fact, one third of the total population is categorized as obese. In addition, obesity accounts for the largest number of hospital admissions in the country and it has also become an expensive disease to treat.

Another reason for the escalation of health care costs in the U.S. is the use of expensive technologies, which has raised heath care cost despite being the best in the world. It is believed that the country overuses health care technologies, which leads to a high expenditures. In addition, expensive technologies are over emphasized even where other forms of treatment can be used (Herman).

The overall cost of medical services and drugs has also increased because of little regulation of the cost and pricing. This gives the drug manufacturers freedom of inflating the prices of newly manufactured drugs.

To control the rising cost of healthcare, the country should ensure that it avoids overemphasis on the use of expensive technologies. Besides this, the government should regulate the prices and cost of drugs together with the price of all medical services. The government should implement a fat tax to control the obesity rate in the country. Also, the government should ensure that it puts subsidies in place.

Moral hazard is the health care a person purchases after he or she gets insured. As much as moral hazard is helpful, it can turn out to be a problem because it encourages the consumers to get medical services that are not important to their health (Nyman). The consumers also tend to overuse the services provided in a manner that they would not have done if they were not insured. The moral hazard is also disadvantageous because it makes the insurance firms incur losses even where they can be avoidable

The Obama’s plan will work in improving the health sector in the United States due to its features, which include existence of tough rules on the private insurers and its lack of allowance of public options. In addition, the plan will create new insurance markets to help Americans in obtaining insurance without depending on employers provided coverage (AFP). The other key feature is the provision of subsidies, which will target the high earners. Lastly, the plan includes drug benefits to the elderly. If the plan is implemented, the health care in the United States will manage to cover all citizens.

The national health program will have major impacts to the country if it is implemented in the right manner. The program will have a lot of benefits to the economy of the United States because it will minimize the high expenditure used in the provision of health care services. Generally, a national health program improves the economy because it ensures that everybody is healthy, therefore, the labor force will improve and in turn increase the revenue of the country. The other advantage is that it helps in minimizing the number of deaths experienced because of diseases. This is because it aids in promoting health. Because of this, few resources will be needed to cater for healthcare in the United States.

Works Cited

AFP (Ed.). Main Points of Obama Health Care Plan- Points. The Independent. n.d. Web.

Herman Bob. A look from within: Why are U.S. Healthcare Costs so High? Becker’s Hospital Review. n.d. Web.

Nyman John. Is Moral Hazard inefficient? The Policy Implications of A New Theory. Health Affairs. Web.