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Healthcare spending has spiraled upward for decades. 

Americans forgo necessary health care every single day because they can’t afford it. Caroline Pearson, executive director of the nonprofit Peterson Center on Healthcare. 

The average American spent $1,425 out of pocket on health care in 2022, according to the Peterson-KFF Health System Tracker. Out-of-pocket expenses are the ones not covered by insurance. 

Americans spend more out of pocket on health care than people in most comparable countries, the health policy nonprofit KFF found. For example, out-of-pocket healthcare costs totaled $764 per person in the United Kingdom in 2022. 

“We don’t consume much more health care than other countries,” said Dr. Atul Grover, executive director of the nonprofit AAMC Research and Action Institute. “We just pay a lot more for each thing.” 

The United States spent $4.87 trillion on healthcare in 2023, according to KFF. That’s $14,570 per person. One nonprofit Health Care Cost Institute report found that the average person with employer-sponsored insurance spent $6,710 on health care in 2022. 

For a family, the average health insurance premium cost $25,572 in 2024, combining employer and family contributions, according to KFF. Premiums have increased by half since 2014. 

Only a fraction of that premium comes out of the employee’s pay.

“The vast majority is getting picked up by the employer,” Pearson said, “as a benefit in place of wages.”  
It is easy to think of the premium as lost wages. 
“Every month, your paycheck is smaller than it would be because your premium costs are higher,” she said. “Every year, your wages increase by less because your employer pays more for health care.” 

Total national health spending has more than doubled since 2000, after inflation, from $2.2 trillion to $4.9 trillion, as of 2023, according to the Peterson-KFF tracker. Health spending per person has nearly doubled in those years, from an inflation-adjusted $7,908 in 2000 to $14,570 in 2023. “It goes up yearly, and it generally goes up a little bit faster than inflation,” said Pearson of the Peterson Center. 

The United States spends more on health care now than 20, 30, or 50 years ago. In 1970, healthcare comprised 7% of the nation’s Gross Domestic Product. In 2023, it ate up nearly 18%. Americans are spending more of their paycheck on health care. Healthcare spending consumed 8.2% of the average household budget in 2019, up from 5.4% in 2000, according to KFF.  

“People are paying more out of pocket,” Grover said. “And that’s certainly felt more severely for people at the middle- and low-income levels than for people who can afford great health insurance and can also afford to pay more of a share of their health care costs.” 

According to a Census Bureau analysis, twenty million Americans owed medical debt in 2021. Three million people owed more than $10,000. Collectively, Americans owed at least $220 billion. Not surprisingly, lower-income Americans are more likely to carry medical debt. So are rural Americans and people living in the South.  More surprising, perhaps, is the medical debt burden on seniors.  

A 2023 watchdog report found that seniors face more than $50 billion in unpaid medical bills, many of which they should not have to pay ‒ Medicare should. 

Nearly four million seniors reported unpaid medical bills in 2020, the Consumer Financial Protection Bureau found, even though almost all had health insurance. In many cases, debt collectors pursued seniors for money they didn’t owe. Medicare, the federal program, was created to protect older Americans from medical debt. Medical debt drives many Americans into bankruptcy. One 2019 scholarly paper found that over half of bankruptcy filers cited medical expenses as a contributing cause. 

What’s driving up the cost of care? 

One big reason for rising health care costs is that America is aging: Older people use more health care. The American population is the oldest it has ever been and is getting older. And medical spending rises rapidly with age. According to the Peterson Foundation, per-capita healthcare spending averages $6,669 for adults ages 19 to 44. For seniors ages 65 to 84, it averages $20,503. For people 85 and over, it averages $35,995. However, other affluent nations also have aging populations, and America spends more on health care than all of them.  

At least one-quarter of healthcare spending in America “may be considered waste,” according to a 2019 article in the “Journal of the American Medical Association.” 
One component of waste is red tape: the United States spends $1,055 per person on healthcare administration, compared to an average of $194 in peer countries, according to a 2023 analysis by the Peterson Foundation. 

Another problem is overpricing. A recent study found that an MRI scan of the lower spinal canal costs $1,311 in the commercial market but only $269 under Medicare. Scattershot pricing seeds at least $230 billion in waste per year, the Peterson Foundation found.  

The federal government tends to underpay for health care through Medicare and Medicaid, Grover said. He said hospitals “lose 10 to 15 cents on the dollar” when the government is paying.  

“They have to figure out how to make up those costs somewhere else,” he said, which means higher prices in the private insurance market. 

Healthcare providers sometimes allude to the three Ds, “delay, deny, and don’t pay,” to critique the insurance industry, Grover said. The idea is that insurers try to get out of paying claims. 

The slogan evokes “defend,” “depose,” and “deny,” words reportedly etched on bullet casings found at the scene of the December murder of the UnitedHealthcare CEO.  

“We have to dance with the insurers,” Grover said. “And I think people are getting stuck in the middle.” 

But hospitals, clinics, and pharmaceutical companies are charging more, too. Per-person spending on prescription drugs rose from $1,155 in 2018 to $1,563 in 2022, according to the Health Care Cost Institute. Spending on outpatient services rose from $1,596 to $1,889 in those years. 

“There’s not a lot of competition, obviously, in the hospital market,” said John Hargraves, director of data strategy at the institute. “People are not looking at a price list and making their decisions based on, ‘Hospital B has a sale, so let’s go there.’”  

A wave of consolidation has concentrated power in both the insurance and healthcare provider industries, Pearson said.  

Consolidation, she said, has pushed up prices on both sides. In some cities, dominant insurers “are price-setters.” In others, prestige hospitals wield “a tremendous amount of negotiating power.” 

A 2023 analysis by the Commonwealth Fund, a healthcare research nonprofit, identified five key components of excess health spending in the United States, compared with other affluent nations:

• Higher administrative costs for insurers, such as claim coding and submission (15% of excess spending) 

• Higher administrative costs for providers (another 15%) 
• Higher costs for prescription drugs (10%) 
• Higher doctor salaries (10%) 
• Higher nurse salaries (5%) 

But it’s hard to blame any one healthcare sector for the runup in spending. In the 1970s, hospital spending grew faster than other sectors, according to a KFF analysis. Since 2020, by contrast, prescription drug spending has risen at a swifter pace.  

“Total U.S. health care spending has increased steadily for decades,” researchers from the AAMC Research and Action Institute wrote in a 2022 brief. “Yet, no single sector’s health care cost ‒ doctors, hospitals, equipment, or any other sector ‒ has increased disproportionately enough over time to be the single cause of high costs.” 

How often do insurers deny health care claims? 

It’s hard to know how often private insurance companies deny claims because they don’t generally publish the data. A 2023 KFF analysis of insurance delivered under the Affordable Care Act found that 17% of in-network insurance claims were denied in 2021.  In a 2023 KFF survey, 18% of insured adults reported that their insurer did not pay for care they thought was covered in the past year.  

Is anyone trying to reform health care? 

The landmark Obamacare health care package, enacted in 2010, is nearly 15 years old.  
And not a lot of meaningful reform has happened since, health officials say. 

“We have not, to date, seen a lot of leadership at the federal level on health care spending,” Pearson said. 

In 2020, Congress passed the No Surprises Act. Hailed as significant reform, the act protects patients from whopping bills filed by out-of-network doctors during medical emergencies. 

According to industry surveys, patients are indeed seeing fewer surprise bills. However, a ProPublica investigation found that the new law may generate higher premiums.  

A newer federal law enables the federal government to negotiate drug prices for older Americans, potentially slashing the cost of Medicare’s most expensive medicines.  

President-elect Donald Trump’s penchant for unpredictability “makes it difficult to figure out his health care priorities” in his second term, KFF reports. 

However, other nations offer examples of potential healthcare reforms for the United States.  

One idea: Cap out-of-pocket spending for patients, setting an upper limit on how much they are required to spend. Other wealthy countries, including the Netherlands, the U.K., and Germany, have comparatively minimal out-of-pocket expenses for health care, according to a report by the Commonwealth Fund.  

Another potential reform: Make health insurance progressive, like America’s tax system. Grover said insurance companies and employers could charge lower premiums to people who earn less.  

For people who are living paycheck to paycheck, that out-of-pocket expense feels harder and harder to be able to meet.

C Raina MacIntyre, UNSW Sydney

Donald Trump’s plan to withdraw the United States from the World Health Organization (WHO) has been met with dismay in the public health field.

Some have called one of the US president’s first executive orders “a grave error” and “absolutely bad news”.

What does the WHO do?

The WHO is a United Nations agency that aims to expand universal health coverage, coordinates responses to health emergencies such as pandemics, and has a broad focus on healthy lives. It does not have the power to enforce health policy but influences policy worldwide, especially in low-income countries.

The WHO plays an essential coordinating role in surveillance, response, and policy for infectious and non-infectious diseases. Infectious diseases have the most pressing need for global coordination. Unlike non-communicable diseases, infections can spread rapidly from one country to another, just as COVID spread to cause a pandemic.

We have much to thank the WHO for, including the eradication of smallpox, a feat that could not have been achieved without global coordination and leadership. It has also played a leading role in the control of polio and HIV.

Why does the US want to withdraw?

The reasons for withdrawing include:

mishandling of the COVID-19 pandemic … and other global health crises, its failure to adopt urgently needed reforms, and its inability to demonstrate independence from the inappropriate political influence of WHO member states.

President Trump initiated withdrawal from the WHO over similar concerns in 2020. However, President Biden reversed this in 2021.

What happens next?

The withdrawal may take a year to come into effect and may need approval by the US Congress.

How this will play out is unclear, but it seems likely the WHO will lose US funding.

The US withdrawal may also be the final nail in the coffin for the WHO Pandemic Agreement, which faltered in 2024 when member states could not agree on the final draft.

Trump’s executive order states that all negotiations regarding the pandemic agreement will cease. However, the order hints that the US will look at working with international partners to tackle global health.

The US Centers for Disease and Control (CDC) already has such international partners and could feasibly do this. It already convenes a global network of training in outbreak response, which could provide a model. However, moving in this direction needs finessing, as another objective of the new US government is to reduce or cease international aid.

The WHO also convenes a range of expert committees and networks of reference laboratories. One among many networks of laboratories is for influenza, comprising more than 50 labs in 41 member states. This includes five “super labs,” one of which is at the CDC. It’s unclear what would happen to such networks, many of which have major US components.

With the threat of bird flu mutating to become a human pandemic, these global networks are critical for the surveillance of pandemic threats.

WHO expert committees also drive global health policy on a range of issues. The WHO can accredit labs in non-member countries or for experts from non-member countries to be on WHO expert committees. However, how this will unfold, especially for US government-funded labs or experts who are US government employees, is unclear.

Another potential impact of a US withdrawal is the opportunity for other powerful member nations to become more influential once the US leaves. This may lead to restrictions on US experts sitting on WHO committees or working with the organization in other ways.

While the US withdrawal will see the WHO lose funding, member states contribute about 20% of the WHO budget. The organization relies on donations from other organizations (including private companies and philanthropic organizations) comprising the remaining 80%. So, the US withdrawal may increase the influence of these other organizations.

A chance for reform

The Trump administration is not alone in criticizing how the WHO handled COVID and other infectious disease outbreaks.

For example, the WHO agreed with Chinese authorities in early January 2020 that there was no evidence the “mystery pneumonia” in Wuhan was contagious, while in reality, it was likely already spreading for months. This was a costly mistake.

There was criticism over WHO’s delay in declaring the pandemic, stating COVID was not airborne (despite evidence otherwise). There was also criticism about its investigation into the origins of COVID, including conflicts of interest in the investigating team.

The WHO was also criticized for its handling of the Ebola epidemic in West Africa a decade ago. Eventually, this led to a series of reforms, but arguably not enough.

More changes needed

US public health expert Ashish Jha argues for reform at WHO. Jha, the dean of the Brown University School of Public Health and former White House COVID response coordinator, argues the organization has an unclear mission, too broad a remit, poor governance, and often prioritizes political sensitivities of member states.

He proposes the WHO should narrow its focus to fewer areas, with outbreak response key. This would allow reduced funding to be used more efficiently.

Rather than the US withdrawing from the WHO, he argues the US would be better to remain a member and leverage such reform.

Without reform, there is a possibility other countries may follow the US, especially if governments are pressured by their electorates to increase spending on domestic needs.

The WHO has asked the US to reconsider withdrawing. But the organization may need to look at further reforms for any possibility of future negotiations. This is the best path toward a solution.

C Raina MacIntyre, Professor of Global Biosecurity, NHMRC L3 Research Fellow, Head, Biosecurity Program, Kirby Institute, UNSW Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.