US health care prices

The US spends twice as much per capita on health care as other developed countries, and it is not because Americans are notably less healthy, nor do they visit doctors, clinics and hospitals more frequently. The main reason for the outrageously high expenditure, writes Princeton economist Uwe Reinhardt, is that prices are outrageously high. Moreover, prices in the United States are not uniform. They vary markedly, and the patient typically has no idea of what the bill will be until after a service is provided.

In most other countries, prices for health care goods and services are not negotiated between individual health insurers and individual physicians, hospitals or drug companies, as they are in the private insurance sector in United States.

Instead prices there either are set by government or negotiated between associations of insurers and providers of care, on a regional, state or national basis. ….

[Americans pay high prices for health care because] the payment side of the health care market in the private sector is fragmented, weakening the bargaining power of individual insurers, especially vis-

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