My friend S. has been involved in the business side of health care for many years. I asked her, why does health care cost so much.

“Part of it is that it does cost that much,” she said. “It’s really expensive to provide health care. There’s the doctor, the office, the people, the equipment, the facility. Health care is unbelievably expensive because so much goes into it. it’s an incredibly expensive commodity.”

Other top reasons, in her opinion?

–Malpractice and the malpractice insurance system.

–Layers of care are required: a doctor, a specialist, a hospital etc. Then, when you get to procedures, the equipment is expensive. Sometimes information is lost and tests are duplicated.

–The medical-care system is for-profit and publicly traded.  “Investors are  making money,” she pointed out. And it’s not just the for-profit hospital industry or the big pharmaceutical companies or the insurance companies; it’s also medical-supply makers, providers of dialysis and a whole range of other profit-making entities. At the same time, she said, the lack of transparency makes pricing hard to ascertain. (Grocery stores can compete effectively as for-profit enterprises, of course, but their prices are posted publicly; if prices are hidden from view, then the for-profit equation becomes much more complicated, the way it used to be in real estate, airline ticket sales or car sales, before the transparency of the web arrived to change those marketplaces.)

–Our health-care system is historically treatment-oriented and not prevention-oriented.  Since it’s treatment-oriented, providers are rewarded for giving more treatments, more procedures, more tests; prevention, counseling and so on are not rewarded financially.

That’s a reasonable list. Oh, and she also mentioned this: the system is so complicated that a lot of mistakes are made, and those mistakes lead to an incredible amount of waste and confusion and duplication of effort.

What do you think? Why does health care cost so much?

Jeanne Pinder

Jeanne Pinder  is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded...