Here in the U.S. we spend about the same percentage of the gross domestic product on Medicare alone as other advanced countries spend on all healthcare put together, from all sources — government, private insurance, and out-of-pocket spending by patients. Why do we spend so much to get outcomes that are pretty much average?
People on the political right tend to blame the government, lack of market competition, or more recently “Obamacare” (or just plain Obama), even though costs have actually risen more slowly since the Affordable Care Act was passed. Meanwhile, people on the left blame high profits for insurance companies and high salaries for their executives, plus high administrative costs, but in reality that’s at most a fraction of the problem. It’s in fact a complicated combination of things.
The following ten-minute episode of Crash Course Economics talks about this, and while you can certainly quibble about it (and what’s up with those stupid flashing borders around the stock photos?), on the whole it’s pretty informative.