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Rising Health Care Costs and Potential Solutions

The United States has one of the highest healthcare costs in the world, spending $4.5 trillion on healthcare in 2022. In countries with similar levels of wealth, healthcare costs per person are less than half. Since the 70s, U.S. health spending has risen to roughly 17.7% of GDP. However, despite this spending, American healthcare ranks below the other top 10 wealthiest nations in terms of accessibility, equity and quality of care. 

While these costs contribute to the national debt, a lot of the burden is also placed on consumers. Over the past 20 years, the price of healthcare services has increased substantially–growing at a rate of 3.1% per year while prices for other household goods and services grow at an average rate of 2.6% per year. This is difficult for Americans, many of whom have shared that they find it difficult to afford healthcare. 

As a result, many individuals are forced to postpone healthcare services or forgo medication due to financial concerns. In addition, roughly 25% of American adults have admitted that they have postponed or forgotten necessary health care because of costs, and one in five American adults have skipped filling prescriptions to save money.

The largest three components of U.S. healthcare expenses are insurance administration costs, provider spending on administration services and higher costs for prescription drugs. This means the largest contributor to U.S. healthcare prices is the overcomplication of health administration. In fact, the United States spends over three times as much on administrative costs as the next highest country on a list compiled by the OECD (Organisation for Economic Co-operation and Development), coming in at $1,055 per person on administrative costs compared to Germany’s $306 per person.

To solve these issues, several economists have proposed standardizing administration systems and placing support price caps on medications to increase efficiency and decrease unnecessary costs. 


Lunna Lopes, Marley Presiado. “Americans’ Challenges with Health Care Costs.” KFF, 21 Dec. 2023,

“David Cutler on Trimming U.S. Healthcare Costs.” Harvard Magazine, 17 Apr. 2020,

“Ranking the Best Healthcare in the World by Country.” International Citizens Insurance, 22 Jan. 2024,

“Why Are Americans Paying More for Healthcare?” Peter G. Peterson Foundation,,to%2017%20percent%20in%202022. Accessed 7 Feb. 2024. 


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