Healthcare has become one of the most important issues in the US political landscape in recent times. The Affordable Care Act was President Obama’s most significant achievement as well as the most high-profile and controversial bill in decades. Healthcare is often a key issue in elections, with Republican candidates promising to repeal “Obamacare” and Democratic candidates promising to expand socialized healthcare. It is a key issue for good reason. The United States spends more on healthcare than any other country. According to the Peter G. Peterson Foundation, healthcare spending is around 17% of America’s GDP, and the US spends around $11,000 per capita for healthcare costs; both figures are around double the average for developed nations. The federal government spent almost $1.4T on just Medicare and Medicaid in 2020, out of their total spending of $6.55T. At the same time, the American healthcare system is infamous for being absurdly expensive for patients. How can the government spend so much more on healthcare than other countries, yet citizens still have to pay more for healthcare than many other countries?

Clearly there is a problem with the cost of healthcare. According to the American Medical Association, the largest chunk of money is spent on hospital care, followed by other personal health care, physician services, and prescription drugs. The high costs of prescription drugs is due to the fact that Medicare cannot negotiate prices with pharmaceutical companies and is forced to pay the company’s prices, which are already higher than they should be, since pharmaceutical companies charge higher prices in the US to subsidize cheaper prices in other countries. Insurance companies, which base their reimbursements on Medicare rates, are forced to pay more for drugs and shift the costs onto consumers by increasing premiums. Physician services are high due to high physician compensation rates in America. Physicians are able to demand high compensation due to their short supply. Hospitals are the biggest contributor to healthcare spending due to the high levels of administrative bloat in hospitals. Since Medicare is slowed down by bureaucracy and the insurance system is inefficient and expensive, hospitals have to devote entire departments to billing and following regulations, in addition to maintaining human resources and legal departments like many other companies. All these costs add up.

How can America solve this problem? America is culturally rooted in private enterprise and small government. Other developed countries, such as Germany and Australia, have managed to maintain a private healthcare system and keep spending low. However, this is with the presence of a government-funded public option. Government intervention is very unlikely in the United States. According to the Hill’s list of largest lobbyists, in 2016, numbers 3 through 6 were in the healthcare industry, representing insurers, hospitals, pharmaceutical companies, and doctors. All of these groups, which are consistently in the top 10 lobbying groups, stand to benefit from the status quo and will oppose any change to the healthcare system that affects their bottom line. It is not even guaranteed that government intervention would be beneficial, since it seems that the primary driver of healthcare costs is due to administrative and bureaucratic burdens, which government is generally the cause of, not the solution to. Therefore, the private system has little incentive to fix the current healthcare ecosystem, and the public system has little ability to fix it.

In conclusion, there are ways to fix healthcare in the United States, though none of those ways are realistic in our current environment. The private sector is designed to cost as much as possible, and the government cannot fix the problem but actually makes it worse. It would take a united populist movement to drive any change to this system; however, the country is so divided and polarized that this is unlikely to happen any time soon. Unfortunately, while both sides recognize that the current healthcare system is unsustainable and needs to be fixed, one side believes that more private enterprise and less government involvement is the solution, while the other side believes the opposite. Until they can reconcile these differences, or until healthcare costs rise so high that they have no choice but to do something, no meaningful changes will occur.