In today’s heated political and economic debates, healthcare reform and healthcare spending remain a hot topic of conversation – and rightfully so!

Why is it that while the U.S. spent over $8,000 per capita on health care in 2010 (almost 50% more than Norway and Switzerland in 2nd and 3rd place), per OECD ratings, we deliver only average level of care based on U.S. lower life expectancy, lower than Switzerland or Norway. Life expectancy graph puts the U.S. roughly in the middle of the developed countries in life expectancy at birth (the longest gevity is in Japan). How Does the United States Compare page 1.

The problem with that is that other developed countries who show even higher life expectancy than the U.S. are able to bring their population to such age for a fraction (or at least for 50% less) of total health care cost than here in the U.S. It shows that the huge per capital spending does NOT necessarily assure or ensure longer gevity delivered through better care or more advanced technological treatments.

So WHY does health care cost so much in the U.S.?

The answer comes under the cloak of science, as the most significant contributor to U.S. health care cost growth is technology innovation & medical advancement. Clear and simple. We have the best diagnostics, imaging, new-surgery-techniques, technological possibilities and acute care treatments & capabilities in the world – bar none. The fact that we are also a wealthy country contributes to our income growth meaning that the wealthier the country – the more of healthcare consumer spending and insurance-induced demand there is.

It stands to reason that while new medical technology may be expensive, when used in time and appropriately, it does extend patients lives, improves their quality of life which in turn makes them live longer and makes them more productive. So technology – it’s a go! But the need for increased healthcare efficiency with curbed spending will bring a major strain on the U.S. health system in the coming years.

While the U.S. has the best diagnostic and acute health services in the world, we are lacking in preventive care and in management of chronic diseases and conditions affecting a large segment of U.S. (aging) population. Additionally, the wealthiest country in the world and we have around 50 million un-insured people from working families! Yes, you heard right, a vast majority are from working families – as in low-income workers unable to afford private or employer-based health plans premiums. Kaiser Family Foundation Primer (2010) states that 50% of ALL health care spending is used to treat 5% of the population and they are the people with 3+ chronic diseases needing ongoing medical & nursing care, list of medications, follow-up doctor’s visits and other services. http://www.kff.org/insurance/upload/7670-03.pdf

Needless to say that the un-insured have overall much worse health conditions as, due to financial constrains, they do not go see doctors with first symptoms, do not get medications to correct or manage conditions, do not go for tests or follow ups to see how such condition(s) can be treated or fixed or improved. So such condition(s) grow in silence and when finally there is a life-threatening event – they will go to emergency rooms where they will get the care including all those technology innovation & medical advancement tests, images, diagnostic procedures and latest treatments, but they will also get a bill for all that technology innovation & medical advancement. And anybody who went through ER and spent a couple of days in a hospital knows the amount I am taking about here! And without insurance plan to help cover the large amount, they are left with a stark total! http://www.kff.org/uninsured/upload/7451-06.pdf

Let’s not forget, these un-insured are not insured not because they don’t want to or feel like getting a health insurance, but because their low-income jobs leave them unable to pay for private or employer-sponsored health plans and not eligible for Medicaid and too young for Medicare (over 65 y.o.)  Yes, it is true, hospitals can write something off, but on average, it still leaves the low-income un-insured with a bill of about 1/3 of the hospital cost. And good luck with that!