Health care has always been a problem in the US because of its high cost. The US spends 17-18% of its GDP on healthcare, which is almost double of what most other developed countries spend on healthcare. While some argue that the high cost is not a problem because it is the result of better treatments and technologies in the US, the real reason behind the high cost is the lack of government regulations in healthcare.
People have tried to explain why Americans spend so much on healthcare in the US, and explanations include that Americans visit the hospital more often, Americans are unhealthier, and there is better treatment in the US. However, these factors only contribute a small amount to the total cost of health care. Studies have shown that compared to some people in European countries, Americans spend less time in hospitals, more Americans are obese but there are less smokers and drinkers, and there is no overall visible improvement in the quality of healthcare when comparing diseases like cancer or comparing life expectancies. The main problem comes down to highly inflated prices for treatments in the US due to the absence of government regulations. Hospitals often put their own interest before the interest of their patients by putting patients on the most expensive or unnecessary treatments in order earn greater profits.
In addition, hospitals are allowed to decide their own prices. Consequently, hospitals in different states and even different locations within the same state can charge very different prices for the same treatment. To make it worse, patients have no way of finding out the cost of a treatment until they get their hospital bill. Unlike other markets in the economy, hospitals do not show patients the price of the treatments they are getting. As a result, economic forces that regulate the prices in other markets do not apply for hospitals. Patients are not able to make well-informed decisions about which hospital to go to and what treatments to get, and there is no competition among hospitals. Usually, these forces play an important role in driving the price of any market towards equilibrium, but the masking of prices prevent them from working so prices remain unreasonably high.
Hospitals are not the only ones at fault for high hospital bills; health insurance companies add to the problem. The job of health insurance companies is to lower the cost of healthcare. However, this creates an incentive for hospitals to raise their prices in order to not lose profit, so the prices of treatments inflate even more. Insurance is often expensive or denied to those with pre-existing medical conditions, so tens of millions of people not covered by insurance. Those people have to pay the full inflated prices when they are the ones who need a discount the most.
In order to lower the cost of healthcare, I believe the government should impose regulations that allow patients to make well-informed decisions on what treatments they should get and create ceiling prices for certain treatments. Regulations that force hospitals to be transparent about all the available choices and the cost of each treatment will allow people to make better decisions based on what is best for them. Competition and market forces will drive prices toward equilibrium. For treatments without substitutes, and are therefore inelastic to demand, there should be a price ceiling so hospitals are not able to charge whatever they want, and people who need the treatments have access to them. The main forces preventing the necessary government regulations from happening are lobbyists hired by insurance companies. These lobbyists stop health reforms so hospitals can continue to charge high prices and insurance companies can continue to earn profit through high premiums to bring the prices down. To get the regulations we need, more people need to be aware of what is necessary so they can push for better regulations in healthcare that will tackle the problem of inflated prices in the first place instead of pushing for better government healthcare policies that will provide more benefits and coverages.