Access to quality healthcare is a fundamental right. Yet, nearly half the world's population cannot access essential health services. Healthcare has become inaccessible to many, particularly in the United States. The average price of insulin, a life-saving medicine, is five times as much in the US as in any other country.
Big Pharma
This inaccessibility to healthcare is partly due to giant pharmaceuticals, known as Big Pharma. In the US, the average person spends almost twice as much on pharmaceutical drugs as people in other industrialized countries. Prescription drug spending reached $378 billion in 2021, a 7.8% rise from the year before. Unlike many different countries, the US does not regulate the pricing of pharmaceutical drugs, so large companies like Johnson & Johnson and Eli Lilly can charge exorbitant prices for life-saving medication. In US healthcare, the general supply and demand model no longer applies; Big Pharma monopolizes the industry through patent protections, meaning there is no competition to drive the prices of pharmaceutical drugs down. Not only do big pharma companies hold a lot of wealth, but they also hold a lot of political power and funding bipartisan support. In turn, economic policies never restrict the increasing costs of healthcare.
“Free” healthcare?
A common misconception often thrown around in political or economic conversations is the idea of “free healthcare”. There is no such thing as free healthcare; citizens pay for it either directly through insurers or through taxes. This
While countries don’t have free healthcare, many have established systems allowing for more universal health services. A public insurance system in Canada allows the government to fund healthcare through taxpayers’ money. This is known as a Single-Payer System. The US has Medicare and Medicaid, which are taxpayer-funded public insurance provided to seniors or those living in poverty. Those who don’t have this public insurance need to be covered by private insurance.
High costs
The United States has the most expensive healthcare in the world, averaging $12,318 per person. This happens for a few reasons. When patients are covered by insurance such as Medicare or private insurance, they tend to go for more treatments and procedures than necessary. But that’s not the biggest problem. In most countries, an MRI only costs $200 to $400, yet in the US, the same MRI scan could cost $1500. It can be seen in almost every treatment and procedure – the prices in the US are often 4 or 5 times higher. This is because the US does not have a unified healthcare system that can negotiate with doctors and pharmaceutical companies to create a singular list of procedure prices. These private hospitals, doctors, and clinics are profit-driven, which only adds to the increasing expenses in the private healthcare sector.
Ultimately, healthcare itself is not expensive in most parts of the world. However, in the US, prices are incredibly high due to the lack of governmental regulation. While there have been reforms to help improve access to essential healthcare services, the existence of big pharma companies and Congress, as well as bureaucratic and lobbyist incentives to maintain policies similar to the status quo, prevent the US from giving all its citizens affordable and accessible healthcare.
Reference List
Boyle, M. (2022). 6 Reasons Healthcare Is So Expensive in the U.S. [online] Investopedia. Available at: https://www.investopedia.com/articles/personal-finance/080615/6-reasons-healthcare-so-expensive-us.asp [Accessed 9 Apr. 2024].
Buchholz, K. (2023). Which Country has the Most Expensive Healthcare? [online] World Economic Forum. Available at: https://www.weforum.org/agenda/2023/02/charted-countries-most-expensive-healthcare-spending/ [Accessed 9 Apr. 2024].
CrashCourse (2016). The Economics of Healthcare: Crash Course Econ #29. YouTube. Available at: https://www.youtube.com/watch?v=cbBKoyjFLUY [Accessed 9 Apr. 2024].
Gavali, P. (2024). The World’s 50 Largest Pharmaceutical Companies. [online] Visual Capitalist. Available at: https://www.visualcapitalist.com/cp/worlds-50-largest-pharmaceutical-companies/ [Accessed 9 Apr. 2024].
University of Southern California (2023). Health Care Economics in the United States. [online] healthadministrationdegree.usc.edu. Available at: https://healthadministrationdegree.usc.edu/blog/health-care-economics-in-the-united-states-key-insights-for-upcoming-leaders [Accessed 9 Apr. 2024].
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