Question

Identify a primary reason for the relatively high prices of healthcare in the united states.

Identify and describe a policy option that might result in lower US healthcare costs.

Answer 1

● It is estimated that more than half of the surge in U.S. health-care spending was a result of generally higher prices for health care services. For example, it’s the difference between a simple X-ray as compared to more complex MRIs and other forms of diagnostic services. It is quite often referred to as intensity of care, which means service variety and complexity in health-care services. The price and the variety and complexity is the primary reason for the increase in health-care spending.

● There are some ideas for how to bring down health-care costs in the United States. One of them is a single-payer system in which the government handles all medical payments. The medical providers need to negotiate directly with the government to set the price for each medical test or treatment. This would give the government a lot of leverage to keep health-care prices down. The other is a public option which is government-run health insurance plan. The insured has to pay premiums and deductibles but the plan might hold down cost compared to some private plans, because the federal government need not worry about profits.

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