Why are healthcare costs so high in the US?
There’s no single reason but there are a lot of reasons that add up: Whereas most markets involve two parties — producer and consumer — healthcare is a bastardized 4-party system. There are consumers and producers, but the bills are paid by a 3rd party (insurance company) which is hired by a 4th party (the consumer’s employer). This system very badly limits consumer choice as to what type of insurance and what carrier, and also limits choice as to which medical provider to use. Everyone has perverse incentives. The consumer has no incentive to avoid costs; the producer has little incentive to contain costs; the payer (insurance) is not the beneficiary of the service; and the employer doesn’t care if the insurance is any good, they just want to be able to say they offer the benefit at mimimum cost to them. An employer-based insurance benefit system like that is not a free market and is probably the most dysfunctional system imaginable. Meanwhile, America is the world’s most litigious
