Providers, not insurers, are responsible for excess U.S. health care cost (2024)
US health care costs are debated here as a product of misaligned incentives across insurers, providers, and government rather than any single “villain.” Commenters argue that private insurance adds large administrative overhead and perverse incentives, but also note that providers and medical groups drive prices through consolidation, restricted training slots, and high salaries relative to other countries. Many favor some form of public or single-payer baseline coverage to reduce waste and financial risk, while others worry about handing more power to a politically volatile government and point to trade-offs in access, wait times, and quality.
Role of insurers vs. providers in high costs
- Many agree providers and overall delivery costs, not just insurers, drive U.S. expense: same equipment and services are far cheaper abroad.
- Others argue insurers are still a major problem: ~20–22% of spending on insurer operations is seen as huge for a “middleman,” especially since providers also incur billing overhead.
- Some frame it as “patient + insurer vs. provider,” not “patient + provider vs. insurer,” given provider consolidation and price-setting power.
Incentives, ACA, and market structure
- Several comments stress misaligned incentives: the “buyer” is often employer or government, not the patient; emergencies and information asymmetry break standard market logic.
- ACA’s medical loss ratio (MLR) is criticized for effectively turning insurers into cost-plus businesses: profits grow when overall medical spending grows.
- Others say insurers and providers are in a “Red Queen race” of mergers to gain negotiating leverage, with no one actor able to push prices down.
Public vs. private coverage
- Some favor a single-payer or Medicare-like expansion, often with private insurance on top, citing lower admin costs and international examples.
- Skeptics fear giving more power to a politically unstable or potentially autocratic government; they argue at least private coverage offers employer-based choice.
- There’s recognition that in many universal systems, higher-income people still buy private add-ons due to wait times or perceived quality gaps.
Supply constraints and clinician pay
- Supply-side shortage is repeatedly blamed: residency slots intentionally capped (historically with AMA lobbying), leading to fewer doctors and more NPs/PAs.
- Some say U.S. doctors, nurses, and dentists are paid about twice socialized-system levels and “should” earn less; others counter with long training, debt, and emotional toll.
Administrative waste and denials
- Billing complexity, prior authorizations, and denials are seen as major cost drivers and stressors, diverting provider time from care.
- Disagreement exists on how many denials are “spurious” vs. clerical or fraud control, but multiple anecdotes describe medically standard treatments initially refused, then reversed on appeal.
- Some note ACA plans paying patients small rewards for preventive visits as a side effect of subsidy and quality-rating incentives.