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Running head: THE HIGH COST OF HEALTHCARE IN THE UNITED STATES 1 Understanding the high cost of healthcare in the United States Student’s Name Department, Institutional Affiliation

THE HIGH COST OF HEALTHCARE IN THE UNITED STATES 2 Understanding the high cost of healthcare in the United States The article “A Dozen Facts about the Economics of the US Health-Care System” by the Brookings Institute highlights numerous primary issues with the economics of the United States health care system. One of the main concerns is the high cost of health care in the US compared to other developed nations. According to Nunn, Parsons, and Shambaugh (2020), the prices for drugs, medical devices, and medical processes are often much higher in the US than in other nations. Furthermore, the authors explain that the US has a higher proportion of its GDP devoted to health care than other nations. According to the group discussion, one of the causes of high health care costs identified in the article is the high prices of drugs, medical devices, and medical procedures in the US compared to other developed nations. According to Nunn et al. (2021), a significant proportion of the US GDP is channeled to health care compared to other nations, meaning more money is available to spend on healthcare services. This increased demand for healthcare services leads to higher prices for medical procedures, drugs, and other treatments. Furthermore, a high GDP devoted to health care implies that more money is available to invest in new and more advanced healthcare technology. While this technology can enhance patient care, it can also drive up costs (Marino & Lorenzoni, 2019). High spending on medical education and higher rates of chronic disease are other causes of high medical costs in the US. The authors state that the US spends more on medical education than other developed countries, which can contribute to higher patient costs (Nunn et al. (2021). Moreover, the nation is experiencing increasing rates of chronic disease cases such as obesity and diabetes among its population, which leads to higher health care costs. Overall, these factors contribute to the high cost of medical care.

THE HIGH COST OF HEALTHCARE IN THE UNITED STATES 3 The group proposed several strategies to address these issues and reduce the cost of health care in the US. First, the country needs to increase price transparency by mandating hospitals and other health care providers to divulge their prices for common procedures publicly, and by providing patients with more information about the prices and quality of health care services. This approach could heighten competition among care providers and reduce patient prices. Second, the nation should enhance the negotiation power of the government and private insurance corporations for drug prices, heightening the bargaining power of the payers and lowering the prices of drugs. This goal can be attained by allowing the government to negotiate directly with drug firms on behalf of Medicare and Medicaid beneficiaries and letting private insurance companies negotiate with pharmaceutical manufacturers on behalf of their customers. The country could also adopt the single-payer system to reduce health administrative costs (Nelson, 2022). Single-payer systems have lower administrative costs than multi-payer systems. These measures will reduce the cost of health in the US. According to our group, increasing price transparency, government and private organizations’ negotiation power, and lowering administrative costs strategies are key to reducing health care costs in the US. Nonetheless, concerns were raised on the likely challenges of applying these strategies, such as the political practicability of enhancing government negotiation power and the opposition from the health care industry, such as pharmaceutical corporations and hospitals’ increased transparency and price negotiation. Based on the feedback received, I would consider introducing some changes to the strategies, such as exploring the likelihood of implementing these approaches and looking for other means to lower administrative expenses.

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THE HIGH COST OF HEALTHCARE IN THE UNITED STATES 4 References Marino, A., & Lorenzoni, L. (2019). The impact of technological advancements on health spending: A literature review. OECD Health Working Papers No. 113, 1-33. https://dx.doi.org/10.1787/fa3bab05-en Nelson, J. (2022). Economic effects of five illustrative single-payer health care systems: Working paper 2022-02 (No. 57637). Retrieved from https://www.cbo.gov/system/files/2022- 02/57637-Single-Payer-Systems.pdf Nunn, R., Parsons, J., & Shambaugh, J. (2020, March 10). A dozen facts about the economics of the US health-care system. Brookings . Retrieved from https://www.brookings.edu/research/a-dozen-facts-about-the-economics-of-the-u-s- health-care-system/

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