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Healthcare Quality and Price in the United States

The main problem with the economic aspect of healthcare in the U.S. is its inability to deliver the necessary level of quality at a reasonable price. This issue becomes especially apparent when compared to a similar system in other countries. For instance, the longevity of both male and female population in the United Kingdom is several years higher than that in the U.S. At the same time, the per capita costs of care is approximately 50% higher in the U.S. than in the U.K. The American system is also allocated a percentage of GDP that is almost twice as high as that in Great Britain (Edwards, 2015). However, despite the seemingly generous allocation of funds, the U.S. system constantly fails at bridging the gap between the budget and the costs of care. The following paper provides an analysis of the issue and outlines a possible solution to the problem.

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The problem of deteriorating cost-efficiency can be attributed to several factors. First, the health insurance coverage provided by the employers is exempt from taxes, which requires government spending of up to $200 billion each year (Edwards, 2015). As a result, the employees with high salaries pay fewer taxes than would be possible under equal conditions. On the other hand, for many employees, the existence of a sponsored coverage makes them dependent on an employer and makes it more difficult to change jobs. At the same time, a significant proportion of the population, especially the younger demographic segment, chooses to bypass the insurance option and instead relies on emergency rooms, which introduces additional expenses. Finally, the situation contributes to inflation in the healthcare system, effectively creating a vicious circle.

The second factor is the overall inefficiency of the system. Healthcare professionals are often paid based on the number of interventions and tests performed rather than the outcome of the patients. The patients are rarely aware of the costs of procedures required for the treatment and, since the payment is usually handled by a third party, are not motivated to make an inquiry. The situation is further complicated by the enormous diversity of prices in the field, with the costs of some services within a given area ranging between hundreds and thousands of dollars.

Finally, the third factor is the existence of conflicting interests. The easiest example is the decision-making process facilitated in the collaboration between the healthcare professional and the patient (Kelly, 2012). While the latter get the advantage of making an informed decision, the former receives an opportunity to promote their services, which compromises the fairness of the market. In other words, despite the evident goal of becoming an effective private marketplace, health care consistently fails as a free market.

Admittedly, there is no simple solution to the identified problem. Nevertheless, upon closer inspection, it becomes evident that changing certain parameters of the system may result in a favorable outcome. For instance, it is possible to assume that the removal of insurance tax breaks for the employers could provide the government with the possibility to subsidize health care for the poor. In addition, the employees are expected to seek more cost-effective solutions, approaching the issue from a consumer standpoint. Simply put, the elimination of tax-exempt coverage will bring the system closer to the free market model while at the same time, providing additional subsidies to the most vulnerable population segments.

As can be seen, the problem of low cost-efficiency of healthcare is dependent on several major economic issues. Thus, an effective solution requires the involvement and collaboration of political and economic institutions. Such collaboration is only possible as a result of increased financial transparency and open communication between clinicians, managers, and policymakers, and can result in a more fair and efficient environment.


Edwards, J. (2015). What the NHS ‘A&E crisis’ looks like in comparison to America’s private healthcare. Business Insider. Web.

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Kelly, P. (2012). Nursing leadership & management (3rd ed.). New York, NY: Cengage Learning.

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