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Why is healthcare in the US so expensive? Show more Show less
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Healthcare in America seems to be a lot more expensive than the rest of the world. From research and development for pharmaceutical drugs, to diagnostic tests, to doctors' salaries, everything in America has a higher price tag. In fact, in 2016, 17.8% of the country's GDP was spent on healthcare. Meanwhile, countries such as France, Sweden, Canada, Australia, and many others only spent around 11.5% of their GDP on healthcare-related reasons. Is the higher price of healthcare in America justifiable? What factors are driving the costs of healthcare and making it so expensive?

Most of the healthcare sector is profit-oriented not service-oriented Show more Show less

Several companies and specialized workers allow the American healthcare system to provide exceptional care. This large number of players, combined with a for-profit type economic model, challenges the healthcare industry to provide the best standards of service. But this system also makes the healthcare system more expensive by adding extra capital and human costs to the process.
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Most hospitals are for-profit institutions which focus more on making money than caring for patients

Hospitals provide a service that many consider a human right. Yet, they still give an enormous bill to profit off of people's sicknesses or injuries. For-profit hospitals incentivize expensive healthcare in the US.

The Argument

Most hospitals in the US are for-profit, meaning they benefit from providing healthcare to citizens beyond what they need to actually provide the treatments. The executives in the hospital will earn more money if care is more expensive. This is a direct incentive for hospital employees to make care more expensive. Things such as running extra tests, prescribing unnecessary drugs, gathering frivolous data, or even charging an exuberant amount for treatment, increases the cost of healthcare enormously. Increasing the cost of healthcare, in turn, increases profits for the hospital. For-profit hospitals also spend lots of money on advertising in order to convince patients to go to their hospital so to earn more income. The cost of advertising directs funds away from buying newer, better equipment or hiring more people. This added cost consequently makes healthcare even more expensive.[1] Hospitals being utilized as a profitable institution make American healthcare more expensive. If hospitals were to become more service-oriented, and received funding from the government, they would lose the incentive to charge high prices, perform unnecessary expenses, and advertise, leading to more affordable healthcare and better care for patients.[2]

Counter arguments

Although it does drive costs up, profitable hospitals are what ensures a high quality of care for patients. If hospitals don't take good care of their patients, bad reviews, complaints, and legal action will cause them to lose business. When hospitals rely on the business for profit, they have a strong incentive to provide a good service to their patients so they can continue making money. If hospitals were not for profit, the personal incentive to the doctors, nurses, and workers would not be performing their job well and patients would not receive care at the same level. There have also been many established research papers and analyses done which proved that government-controlled hospitals simply won't work. Given the complex nature of the American healthcare system, governments would prove inefficient and insufficient in understanding the complexities of the field. It is better managed by private hands, and ultimately the for-profit model motivates doctors and workers to provide top-notch services.

Proponents

Premises

[P1] Hospitals in America make profits from their services, which gives incentives to make hospitals more expensive so they will make more money. [P2] Healthcare in America is expensive, and for many, unaffordable.

Rejecting the premises

[Rejecting P1] By providing incentives for profit, hospitals are actually making healthcare better by pushing doctors to give top-notch care to patients. [Rejecting P2] The for-profit model is not only justifiable but beneficial to patients.

References

  1. https://healthcaremba.gwu.edu/blog/profit-vs-nonprofit-hospital-administration/
  2. https://www.theguardian.com/us-news/2020/apr/16/profit-over-people-cost-over-care-americas-broken-healthcare-exposed-by-virus
This page was last edited on Friday, 28 Aug 2020 at 00:13 UTC

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