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Top 5 Reasons Why Healthcare Is Expensive
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Top 5 Reasons Why Healthcare Is Expensive

The Centers for Medicare & Medicaid Services estimated in 2021 that healthcare spending would rise to $4.3 trillion. National health spending is projected to increase by up to  $6.8 trillion by 2030, notwithstanding the COVID-19 pandemic’s impact on fewer people using health care.

Shocking numbers, right? Each year, the average American spends a substantial sum on healthcare costs. Healthcare expenditures have increased due to rising premiums, greater copays, skyrocketing prescription drug costs, and other healthcare issues.

What could be the reason for this? If this continues to rise? Tune in to this article until the end to know why.

5 Reasons For The Rise Of Health Care Costs

Before we go around and rant about how medical services are now getting costlier, let us look and understand the top 5 healthcare issues that have been the causes of the rise in Health Care Cost.

1. High-End Medical Equipment

.Medical advancements can prolong our lives and improve our health, but they can increase spending and encourage excessive use of pricey technologies. Even if there is little to back up their claim that they are more effective, Americans tend to believe that modern technology and processes result in better care.

This presumption prompts patients and physicians to want the most advanced—and frequently priciest—therapies and equipment.

2. Quantity, Not Quality

Most insurance companies fund each test and procedure and visit doctors, clinics, and other health professionals on a fee-for-service basis. Thus, the number of fees paid increases as more services are rendered.

This may encourage patients who have a poor chance of seeing improved health outcomes to undergo a high number of unnecessary testing and treatment.

3. Expensive Prescription Drugs

In contrast to Europe, where prescription drug prices are government-regulated and frequently based on the clinical efficacy of the prescription, high drug prices are the single greatest area of overspending in the U.S.

The United States spends a total of $1,443 per person as opposed to the other wealthy countries analyzed, which spend $749 on average, with minimal regulation of prescription costs.

4. Defensive Medicine

Some doctors will order unnecessary tests or treatments out of concern for a potential lawsuit. Over time, the price of these treatments rises. Defensive medicine costs, on average, between $100 and $180 billion annually.

These tests can also be expensive. While a CT scan only costs $97 in Canada and $500 in Australia, it costs $896 on average in the United States.

5. U.S Price Variations

Due to the system’s complexity and the absence of any established fees for medical services, healthcare providers are allowed to set their prices. Based on the payer, such as private health insurance or federal programs, like Medicare or Medicaid, as well as the location, the cost of the same medical service might vary dramatically.

What Is The Effect of Expensive Medical Service?

If such causes outlined above remain to create a drastic effect on the costs of medical care, it is expected to prepare for the worst. These are a few possible things to happen when medical services continue rising.

  •  Rising healthcare expenses might ultimately be reflected in increased product prices.
  • It could potentially contribute to inflation in the US and reduce the competitiveness of US goods and services abroad.
  • Adults with lower health are double as likely to put off or forego care owing to financial concerns as those with better health.
  • The percentage of non-insured adults postponing or forgoing care because of expense is greater than that of adults with insurance.
  • High mortality rate


Good healthcare services are a right that should be given to every individual. The high costs in healthcare due to the use of high-end medical equipment, quantity tests than quality ones, rising costs of prescriptive drugs, practice of defensive mechanisms, and the lack of price regulation will continue to cripple the healthcare industry. This puts the poor and the healthcare workers at risk of ill-quality healthcare services.

What do you think should be done to lower healthcare costs? Share your thoughts in the comments.

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