People assert all sorts of nonsense in response to questions like this, usually not at all backed up by the data. The drivers of high US healthcare costs are:

  1. Doctors, nurses, and hospital admins make dramatically, *dramatically* more money in the US than anywhere except Switzerland. Every time a discussion of healthcare costs comes up, everyone tries to point their fingers at middlemen, but the middlemen extract tiny fractions of the revenue stream. Most of it goes to actual humans that are high status, and no one wants to imply they’re lobbying to lower the pay of these folks

  2. The US pays for drug development for the entire world. You can call this the US “overpaying”, or the rest of the world “free-loading”, but the US is a very rich country that has decided to incentivize drug development by allowing drug companies to profit from their massive investments by setting high prices

  3. Americans are fatter than the rest of the rich world (although the rest of the rich world is rapidly catching up) and chronic metabolic-disease is very expensive to treat (everywhere)

Worth noting in this context that the scarcity of doctors is artificial, due to a low cap on the number of federally funded residencies. We could also let more doctors immigrate. My understanding is we make immigrant doctors go through a lot of hoops to validate their foreign training.

https://thedailyeconomy.org/article/how-congress-created-the...

"A few percent."

> There are no official data on their total size, but estimates extrapolated from micro-costing studies suggest that billing and insurance-related services alone comprise about 15 percent of health care spending, and total administrative costs may comprise about 30 percent.

1. https://econofact.org/how-large-a-burden-are-administrative-...?

re: your third point. Americans drive frequently and walk infrequently. It's the same reason why Canada and Australia have similar rates of obesity despite having vastly different approaches to healthcare.

I'm not going to bother fact checking a random comment without any sources, but regarding your second point: do you think "the rest of the world" gets drugs for free?

Some of this may be correct but writing off administrative overhead as negligible is laughable.

Insurance companies spend a maximum of 80-85% of collected premiums on healthcare, and only because this is regulated by law, otherwise it would be even less.

On the other side hospitals, clinics and private practitioners all have dedicated departments and staff whose only job is to deal with billing and negotiations with insurance providers. That also costs a hell of a lot more than a couple percent.

So just adding up these two there's 15-30% of medical expenditure that isn't going towards actual care, just overhead. Recover this cost and the US will immediately fall in line with how much the rest of the developed world spends on healthcare, even with the high doctors salaries and drug costs.

> ...bureaucratic overhead extracts a few more percent.

Respectfully, my perception contradicts this. My GF has been a psychologist for 25 years. For the first half of her career, funding for her work was provided exclusively by a state program (California), but about 10 years ago, the funding transitioned mostly to private health insurance. And it's been a bureaucratic nightmare every since. She had to hire a skilled/well-paid FTE just to manage the billing with the private health insurance companies. And it's still a nightmare to deal with. So yeah, to downplay the "bureaucratic overhead" of private insurance, is not universally accurate, IMHO. Maybe for big hospitals, it represents a small percentage of overheard, but not for smaller providers.

This is one of those comments that make me wish hn gave out a daily use “super upvote”.

I’d only extend that point 2 is true for many cutting-edge treatments beyond simply drug development & is tied to point 1: If you pay doctors top-flight salaries, you get a lot of smart, innovative doctors pushing (at great cost) into the future of medicine.

Similar story with admins working to make care more efficient and also humane, data science teams (yes, big research and academic hospitals have these in spades!) …

America is rich and wants to spend that on medicine. It’s not a conspiracy of oligarchs.