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Did you know why the average person in the United States spends more than $12,000 on health?
Medical expenditures in the United States continue to rise, reaching a staggering US$4.3 trillion in 2021, with an average of more than US$12,914 per person. In the global medical system, the United States' expenditure accounts for 18.3% of its gross domestic product (GDP), ranking first among others. This situation has prompted people to think deeply about the causes of medical expenses.
The health industry covers all industries that treat patients, including treatment, prevention, rehabilitation and palliative care.
The composition of the medical industry
According to international standards, the medical industry can be subdivided into three major elements: services, products and financing. In addition to traditional hospitals and clinics, many ancillary health professions such as nurses, pharmacists and physiotherapists also play an important role in the delivery of services. In fact, healthcare industry providers include a whopping 9.2 million doctors and 19.4 million nurses, demonstrating the importance of this industry.
Factors behind the increase in medical expenditure
Healthcare spending in the United States is growing faster than in other developed countries, mainly for the following reasons:
- Growth in the elderly population: As the population ages, a higher proportion of older people require more frequent and more expensive medical care.
- Developments in medical technology: The development of new technologies and treatments drives up the cost of treatment.
- Health insurance coverage: Although there are some public health insurance plans in the United States, they do not cover all residents, leaving patients with high out-of-pocket costs.
In many cases, those without insurance are responsible for their own medical expenses, which largely contributes to the occurrence of medical bankruptcy.
Different health insurance models
Each country’s medical insurance model has its own characteristics, including:
- The Beveridge Model: The government provides and funds all medical services, common in the United Kingdom and Cuba.
- Bishak Model: Employers and employees share insurance. Typical examples include Germany and Japan.
- National health insurance model: There are both public and private medical services, representing countries such as Canada.
The United States mainly relies on a market-oriented model. Patients usually have to pay medical expenses through insurance companies. This model also makes the price of medical services opaque, further pushing up expenditures.
Challenges and the future of the medical system
Even though the United States is leading in medical technology, high medical expenses still prevent many residents from obtaining the medical services they need. According to estimates, U.S. health care spending is expected to reach 19.9% of GDP in 2025, and this growth will face continued policy and structural challenges.
Will the future healthcare system provide affordable health services to everyone, or will it continue to exacerbate social inequality?
This all points to one question: With such huge expenditures, how should we reshape the U.S. health care system to ensure that every resident has access to basic medical services?
