Why is health care so expensive in the United States?

In the summer of 1998, I accepted what likely has turned out to be my final professional position in medical physics. When I arrived, my health insurance cost was about $240.00 per month, covering only my spouse and myself. Today, the cost for approximately the same policy has exploded to over $900.00 per month. None of you would be surprised at this; almost everyone in the United States has seen a similar rise in health-care insurance expenses. For most of us, this insurance is deducted from our paycheck and we see the amount on our paystub. Compounding this problem is the fact that, not only is the average US health-care cost more than twice the average of other developed nations, but it is rising faster than any other developed nation (see http://www.commonwealthfund.org/publications/issue-briefs/2015/oct/ us-health-care-from-a-global-perspective). It is difficult to think of another industry where there is such a lack of transparency respecting the cost to the consumer, and the quality of the product that is delivered. If we buy a car or TV, there is ample opportunity to assess both the cost and quality of the product. In contrast, a patient never knows the true cost; it is lost in insurance, copays, deductibles, payer-provider contracts, etc., not to mention the fact that you often get bills from multiple entities for the same procedure. The lack of transparency in quality data is even more concerning. How can we possibly tell if a doctor or hospital is any good? Then add the fact that often it is the insurance company that decides where we go, or at least, for whom they will pay. There are usually limited options available through employers because of the deals that employers make with payers. This Editorial is not intended to be a comprehensive or rigorously reasoned critique of the US health-care system but, instead, a synopsis of some personal thoughts and insights. As some of you know, I began a long trek toward a second PhD in 2002, eventually finishing it in 2013. Along the way, I took a number of courses in Health Policy and Health Administration. I studied the health-care systems of many of the other developed nations. I found that, while there were many differences between the various approaches to covering health-care costs, they all seemed to arrive at about the same place respecting cost and quality of service. All, that is, except for the United States. Between 2007 and 2010, I served on the Advisory Panel on Ambulatory Patient Classification Groups (Center for Medicare and Medicaid Services), the so-called APC Panel. I possibly have been the only medical physicist to serve in this capacity. This Panel advises CMS on the valuation of CPT Codes and their grouping within the APC categories, using certain rules. It seeks to advise CMS whenever there is a controversy about the valuation of codes that might unfairly benefit or penalize a drug or device manufacturer or create a barrier inhibiting Medicare patients from receiving services. I was hoping these experiences would help me understand why health care in the United States was so expensive. Although these experiences were helpful, it took several more years and some independent study to come to some tentative conclusions. I am by no means an expert in this area, so I offer my thoughts as a starting place for you, should you wish to investigate this topic on your own. My first insight, which happened in 2012, was that the US health-care system financing seemed to work analogous to a reconfigured VAT tax, a consumption tax found in a number of European nations. If you do not know what this is, I found this definition: “Indirect tax on the domestic consumption of goods and services, except those that are zero-rated (such as food and essential drugs) or are otherwise exempt (such as exports). It is levied at each stage in the chain of production and distribution from raw materials to the final sale based on the value (price) added at each stage. It is not a cost to the producer or the distribution chain members, and whereas its full brunt is borne by the end consumer, it avoids the double taxation (tax on tax) of a direct sales tax. Introduced by the European Economic Community (now the European Union) in the 1970s” (see http://www.businessdictionary.com/definition/value-added-tax-VAT. html#ixzz44oERNuJw). JOURNAL OF APPLIED CLINICAL MEDICAL PHYSICS, VOLUME 17, NUMBER 3, 2016