The Wonk Room

American Health Care: The Staggering Costs of the Status Quo

Right now, the American health care system spends too much on the wrong things for too few people. This status quo is getting very, very expensive.

Forty six million Americans are going without health insurance. Doctors and hospitals spend too much on expensive last-minute care and far too little on preventative care. Disorderly record keeping and a shortage of primary care physicians add billions of dollars in unnecessary coordination and administrative costs. Health care costs burden American companies with a competitive disadvantage, and workers suffer as employers slash benefits to stay afloat.

Here’s what the status quo is costing Americans:

–$1,502 in higher annual premiums by 2010 for a family health insurance policy from unpaid care for the uninsured

–$220 per taxpayer to pay for the government’s share of uncompensated care to the uninsured

–$700 billion per year, $2,300 per person, in unnecessary care

–$2,000 in health care costs for every GM car

–$3,400 per taxpayer to cover chronic conditions under Medicare and Medicaid. The cost and incidence of chronic conditions could be radically curtailed by targeted investments in prevention and primary care physicians.

Now is time for health care reform, which would universalize affordable and accessible coverage, encourage primary care physicians and outcomes-based compensation, and invest in electronic record keeping, prevention and chronic care to reduce long term costs.