I have recently discussed in detail the rapidly increasing costs of American healthcare.
I have suggested ways in which the costs of our public healthcare programs, Medicare and Medicaid, can be controlled.
But the cost of private healthcare is increasing even faster than for the public programs. For example, the cost of Medicare has increased by 21.5% in the last ten years, the cost of Medicaid has increased by 12.5% while the cost of private insurance has increased by 52.6%.
The International Federation of Health Plans (iFHP) has clearly described the high costs of American healthcare compared to other countries. For example:
- Bypass surgery was less than half the price for the U.S. in all the other countries included in the study (see below).
- The average cost of bypass surgery in the U.S. is $78,000 while the second highest cost (New Zealand) is $37,800 (see below).
- Drug prices for most countries were less than half the U.S. price for almost all of the administered and prescription drugs included in the study (see below).
How are these exorbitant prices for private American healthcare being paid? It turns out that individual company employees are paying gradually increasing out-of-pocket costs (premiums and deductibles). But primarily it is employers who are paying the major share of the increased costs. Of course, this means that base employee salaries and wages are substantially less as a result (see below).
Conclusion. The cost of American healthcare is much too high for both individuals and the government. The rapidly increasing federal government costs are the primary cause of our rapidly increasing annual deficits and therefore to our out-of-control national debt. Private healthcare cost increases are largely paid for by employers which means less pay for employees.
So far only Medicare and Medicaid have been able to exert any meaningful cost control and this has been done with strict price controls. It is unlikely that private companies will be able to develop the clout to limit their healthcare costs in any significant way. This means that overall strict price controls for all of U.S. healthcare are almost inevitable.