Providers, not insurers, are responsible for excess U.S. health care cost (2024)

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.