​Medical Madness: Why is healthcare so expensive?

    Many are aware of how expensive healthcare is although,  most don't know the reason why it is expensive. According to National Nurses United, Since 1996, health care costs have been on the slow, but steady rise. Hospitals charge patients more than is necessary, for absolutely no reason other than the promised extra profit. This causes patients to pay a price, that takes a big chunk of money out of their pockets. Price gouging in the healthcare industry should be illegal, because of the constraints placed upon different social classes on what quality of health care they can purchase.

    Price gouging is not new. This is the act of raising the price of some product, making it far more expensive than is necessary to pay back the price of manufacturing. In the healthcare industry, that is happening because there are no laws to restrict the industry from charging above the national healthcare average. The top 100 most expensive hospitals charge more than the national “cost ratio” which is 331%.  “14 U.S. hospitals charge more than $1,000 for every $100 of their total costs (a charge to cost ratio of 1,000 percent) topped by Meadowlands Hospital Medical Center in Secaucus, NJ which has a charge to cost ratio of 1,192 percent.The 100 most expensive U.S. hospitals have a charge to cost ratio of 765 percent and higher – more than double the national average of 331 percent.” What that means is that the hospital sees the flat cost of the service they provided, then inflate it so they can up their profit. This hurts consumers because they are paying more than what they should hospital services. Hospitals are not the only ones in the healthcare industry to do this though.


    Alongside the healthcare industry is the pharmaceutical industry. The pharmaceutical industry is worth a whopping $300 billion a year. Most of that money comes from price gouging prescription medications. One drug that has been scrutinized time and time again, is the Hepatitis C drug Sovaldi. The pharmaceutical company Gilead priced one pill of Sovaldi at $1,000, making it $84,000 for a 12 week treatment course. The reason for this price hike was that the company wanted to make it as expensive as other competing Hepatitis C drugs. This version of price gouging is slightly different from the one that is happening to the drug Daraprim. Daraprim is a drug that is used to treat toxoplasmosis in HIV/AIDS patients. Toxoplasmosis is a disease that spirals from an infection from the Toxoplasma gondii parasite. This disease has flu-like symptoms, which may not harm a healthy person, but someone with a weakened immune system may develop severe symptoms.  Before this year, Daraprim used to cost $13.50 per pill, making it extremely affordable. Martin Shkreli, the CEO of Turing Pharmaceuticals, has recently raised the price from $13.50 per pill to $750.  That being said, Daraprim consumers now have to pay $750 dollars for a pill that should cost no more that $14.  

    With Obamacare enacted, it would seem as if people would have easier access to affordable healthcare. That is not the case. According to CNN Money, many insurance companies want to raise their rates of plans. “In Florida, for instance, United Healthcare (UNH (Links to an external site.)) wants to raise the rates of plans sold on the Obamacare exchange by an average of 18%. Individual policies available outside the exchange through United Healthcare or through a broker would go up by 31%, on average, with hikes as high as 60% for certain plans in certain locations.” If this plan actually goes through, consumers may have to pay more just to be insured. The reason for this is because when Obamacare went through, insurers had no idea how many people would actually use their services. They now have a clear idea on who is using their services, and now want to hike up their prices due to the high demand of basic health care.

     In the Affordable Care Act, it shows restrictions on “excessive pricing” in hospitals. It is only applicable in hospitals that are non-profit and only available for those who have poverty level incomes. Even with this in place, hospitals tend to ignore it because there is no one enforcing rules against price gouging. "For the most part, there is no regulation of hospital rates and there are no market forces that force hospitals to lower their rates. They charge these prices simply because they can” says Gerard F. Anderson of the Johns Hopkins Bloomberg School of Public Health. Without anyone enforcing laws against price gouging, hospitals and pharmaceutical industries can continue charging people however much they want. This will endlessly cause a financial strain on the lower and middle class, but hospitals simply do not care. They only seem to care about the profit they make from struggling payers.

    To conclude, price gouging is a serious issue that affects everyone around the nation, especially those in the lower and middle classes. In light of many years of being stuck with high prices, the media is starting to call more attention to medical price gouging. News outlets like the New York Times and CNN have written about the excessive prices that medical industries are charging. Many wealthy people may not pay attention to price gouging because it probably does not affect them as much as those of lower classes; they should pay attention though because they are being robbed of their money just like the lower classes. Once prices get too high, there will be many who won’t be able to afford healthcare services anymore, thus causing them to suffer if they needed medical assistance. If more people were to stop and think about it, they would realize that inflation in medical bills is just not about paying off hospital services, but about industry greed as well.

Works Cited:

http://www.cnn.com/2015/03/04/opinion/atlas-obamacare-poor-middle-class/ (Links to an external site.)


Crusade, The Health Care. STOP MEDICAL PRICE-GOUGING NOW! (n.d.): n. pag. Web. 13 Oct. 2015. <http://healthcarecrusade.com/Center/Stop%20Medical%20Price%20Gouging%20Now%20.pdf>.


"Health Care Price-Gouging in the U.S." Health Care Price-Gouging in the U.S. Daily Kos, n.d. Web. 13 Oct. 2015. <http://www.dailykos.com/story/2015/06/11/1392533/-Health-Care-Price-Gouging-in-the-U-S>.


Johns Hopkins Bloomberg School of Public Health. "Some hospitals in United States marking up prices more than 1,000 percent." ScienceDaily. ScienceDaily, 8 June 2015. <www.sciencedaily.com/releases/2015/06/150608212620.htm>.


Luhby, Tamy. "Obamacare Sticker Shock: Big Rate Hikes Proposed for 2016." CNN Money. CNN, 2 June 2015. Web. 13 Oct. 2015. <http://money.cnn.com/2015/06/02/news/economy/obamacare-rates/>.


McDermid, Riley. "Gilead (GILD) Agrees to a Discounted Price of $46,000 for Sovaldi in Europe." Gilead Agrees to a Discounted Price of 46000 for Sovaldi in Europe. N.p., 13 Feb. 2015. Web. 13 Oct. 2015. <http://www.biospace.com/News/gilead-agrees-to-a-discounted-price-of-46000-for/364653>.


Nader, Ralph. "Medical Price Gouging and Waste Are Skyrocketing." The Huffington Post. Huffington Post, 13 Jan. 2014. Web. 09 Oct. 2015. <http://m.huffpost.com/us/entry/4589748>.


"Press Releases." New Data – Some Hospitals Set Charges at 10 Times Their Costs. NNU, 6 Jan. 2015. Web. 09 Oct. 2015. <http://www.nationalnursesunited.org/press/entry/new-data-some-hospitals-set-charges-at-10-times-their-costs/>.


Rosenbaum, Sarah. "Tax-Exempt Status For Nonprofit Hospitals Under The ACA: Where Are The Final Treasury/IRS Rules?" Health Affairs Blog. Project Hope, 23 Oct. 2014. Web. 13 Oct. 2015. <http://healthaffairs.org/blog/2014/10/23/tax-exempt-status-for-nonprofit-hospitals-under-the-aca-where-are-the-final-treasuryirs-rules/>.



In this version I changed some of my spelling mistakes, but I also took away some of the bias I had within  the essay. I also changed the way I ended paragraphs with statistics, so I added more analysis at the end of my paragraphs. I also changed my conclusion, I didn't tie together my thesis in the last version, so I tried to in this version.

Comments (1)

Larissa Pahomov (Teacher)
Larissa Pahomov

As somebody who has had major surgery (and saw how much it would have cost me without insurance), this paper didn't really "expand my thinking" — but it would have if I hadn't had that experience.