US Healthcare: Why So Expensive?

Johar Altaf Khan
Author · MSc Chemistry

Dr. Ayesha
Medical Reviewer · MBBS

US Healthcare: Why We Spend Twice as Much for Worse Outcomes

Let me be real with you — I’ve worked in pharma for over 13 years. I’ve seen how healthcare works from the inside. And honestly? The US healthcare system is broken in ways that most people don’t fully understand.

I remember sitting in a meeting with a colleague from the UK. He told me how much he paid for his NHS coverage. I told him what I paid for my US health insurance. He couldn’t believe it.

And then I told him that we have worse outcomes.

He was shocked. So was I when I first looked at the data.

Here’s the reality.

Quick Summary: US Healthcare Spending vs Outcomes

Metric	United States	OECD Average
Healthcare spending (% of GDP)	18%	9%
Healthcare spending per capita	$13,000+	$5,000-$6,000
Life expectancy	76.4 years	80+ years
Infant mortality (per 1,000)	5.4	3.8
Maternal mortality (per 100,000)	23.8	10-12
Uninsured rate	~8%	<2%

Reference: Commonwealth Fund. “U.S. Health Care from a Global Perspective.” 2026.

The Numbers That Don’t Lie

Country	Spending % GDP	Life Expectancy
United States	18.0%	76.4 years
Germany	12.8%	81.8 years
France	12.2%	82.9 years
UK	11.3%	81.2 years
Japan	10.9%	84.4 years
Australia	10.6%	83.1 years
Canada	10.4%	82.3 years

What this tells us: The US spends 1.5x more than Germany, 1.6x more than France — but lives 5-6 years less. ❌

Reference: OECD. “Health at a Glance 2026.” 2026.

Why Is US Healthcare So Expensive?

1. Administrative Waste

Let me tell you what I’ve seen firsthand.

In the US, hospitals have entire departments dedicated to billing. They hire people just to argue with insurance companies. Doctors’ offices have staff who do nothing but navigate prior authorizations and claims.

How much it costs: The US spends ~$1,000 per person per year on administrative costs — compared to ~$100-200 in other countries.

What this means: That’s money that could go to actual healthcare — but instead, it goes to paperwork.

Reference: JAMA Internal Medicine. “Administrative Costs in US Healthcare.” 2024.

2. Drug Prices Are Out of Control

This one hits close to home. I’ve worked in pharma — I know how drugs are priced.

The US pays 2-3x more for the same drugs as other countries.

Drug	US Price	UK Price
Humira	$7,000/month	$1,500/month
Insulin	$300/vial	$50/vial
Ozempic	$1,000/month	$200-300/month

Why: Other countries negotiate drug prices. The US doesn’t.

Reference: RAND Corporation. “International Comparison of Drug Prices.” 2025.

3. The ER Is a Safety Net

People without insurance use the ER for basic care — which is the most expensive setting. One ER visit can cost thousands of dollars. That cost gets passed on to everyone else.

How much: An ER visit for a non-urgent issue costs ~$2,500. A primary care visit costs ~$150.

What this means: We use the most expensive care for the least urgent problems.

4. Fee-for-Service Model

Doctors get paid for doing more — not for doing better.

More tests, procedures, ore visits and MRIs. More surgeries.

What this means: The system incentivizes volume — not value.

What Happens When You’re Uninsured?

I’ve seen this firsthand. People avoid going to the doctor because they can’t afford it. By the time they go, they’re sicker — and treatment costs more.

The result:

Higher mortality rates
More ER visits
More bankruptcies

The US is the only developed country where medical bills are a leading cause of bankruptcy.

What Can Be Done?

Reform	What It Means
Drug price negotiation	Allow Medicare to negotiate drug prices
Universal coverage	Cover everyone — reduce ER usage
Administrative simplification	Reduce billing complexity
Value-based care	Pay for outcomes — not procedures