The American Difference in Health Care Costs: Is There a Problem? Is Medical Necessity the Solution?

Abstract:     
This article attempts to explain why health care costs more in the United States than anywhere else in the world. It concludes that the major reason for this difference is the widespread and immediate availability of high technology care in the United States, with secondary reasons being the higher pay of health care professionals in the U.S. and higher U.S. administrative costs. None of these factors are addressed effectively by cost-control strategies based on review of medical necessity. It is also unlikely that the most politically viable policy options currently available, medical savings account or managed competition, can effectively address these issues. In the end, it may be necessary to focus on designing effective cost control strategies for public programs, leaving the market, however ineffectually, to control costs for private programs.

Accepted Paper Series