The real reason American health care is so expensive

We hear it all the time: Americans pay more for health care than other developed countries. Way more. Health care spending accounts for 16 percent of the economy in the US, while the OECD average is 8.9 percent.

What we don’t talk about as much is why. Americans don’t consume more health care than the Germans or the Japanese. We actually go to the doctor less often.

The real reason American health care is so expensive compared to other countries is that the prices are higher. We pay more for everything from angioplasties to C-sections, from hip replacements to opioids.

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That’s because the private insurance companies that pay for most of these doctor visits, prescriptions, and procedures don’t have enough negotiating power. In other developed countries, the government is the one doing the negotiating, and it’s able to get lower prices.

To learn more about the challenges for the free market to regulate health care prices, check out the video above.

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