The real reason medical care costs so much more in the US
Americans is famous for over-spending on health care with average outcome. We spend 30% more then Canada, Germany, Australia, the U.K, Japan, Sweden, France, the Netherlands, Switzerland and Denmark. Per capita, the U.S. spent almost 10K.
In the U.S, healthcare prices are inflated, drugs are more expensive, Doctors get paid more, Hospital services and diagnostic tests costs more and lot of money spent on managing medical services at the administrative level.
Americans has much higher prices across all health care services. Specialists, nurses and primary care doctors all earn 30 to 50% more compared to other developed economics. Pharmaceutical spending is almost double.
Higher Administrative Costs
American Health Care System needs far more billing specialists to determine how to bill to meet the varying requirements of multiple insurers. Canada and europe with a single-payer system don’t require this level of staffing to administer healthcare.
Drug Costs Highest in US
In most countries, appropriate agencies under the federal government negotiates drug prices with the drug companies, but when Congress created Medicare Part D, it (along with the prescription drug lobbyists) specifically denied Medicare the right to negotiate drug prices. The Veteran’s Administration and Medicaid negotiate drug prices and pay the lowest drug prices.
The Congressional Budget Office has found that just by giving the low-income beneficiaries of Medicare Part D the same discount Medicaid recipients get, the federal government would save $10 billion every year.
The United States does not regulate or negotiate the prices of new prescription drugs. Other countries will haggle with pharmaceutical companies over an appropriate price.
Why Are Doctors So Expensive?
To become a doctor in the U.S. requires a college degree. That is four years at a cost of $20–60K a year for education, room and board.
Another four years of debt to get past medical school at $50–70K a year including room and board.
Every doctor does a residency that goes for a minimum of three years and additional years for sub specialty training fellowships.
There are very good reasons that doctors charges are higher in U.S. and many of them don’t consider it adequate compensation for their time and effort.
Quality of health care in the U.S. fared better then other countries. Long wait times for treatment, are not as much of an issue for Americans as they are elsewhere in Canada and Europe. In treating heart attacks and strokes, the U.S. actually had the best record of any country.
Why are generic drugs cheaper ??
Developing a drug costs millions of dollars, success rate of clinical trials is just under 15%, 1 in 7 is successfull.
Patent Protection is 20 Years in US
Pharmaceutical company that holds the patent is allowed to manufacture, market the drug and eventually make profit from it.
Once the patent expires, the drug can be manufactured and sold by other companies. At this point, the drug is referred to as a generic drug.
Once the patent expires, the generic drug is available in the market, and the monopoly of the patent holder is gone. This encourages competition and results in a big drop in drug costs, which ensures that life saving and important drugs reach the general population at cheaper prices.