{"id":41799,"date":"2026-02-11T07:15:00","date_gmt":"2026-02-11T15:15:00","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=41799"},"modified":"2026-02-17T08:46:21","modified_gmt":"2026-02-17T16:46:21","slug":"why-is-us-health-care-still-the-most-expensive-in-the-world-after-decades-of-cost-cutting-initiatives","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/why-is-us-health-care-still-the-most-expensive-in-the-world-after-decades-of-cost-cutting-initiatives\/","title":{"rendered":"Why is US health care still the most expensive in the world after decades of cost-cutting initiatives?"},"content":{"rendered":"\n

Patrick Aguilar<\/a>, Washington University in St. Louis<\/a><\/em><\/p>\n\n\n\n

In announcing its \u201cGreat Healthcare Plan\u201d<\/a> in January 2026, the Trump administration became the latest in a long history of efforts by the U.S. government to rein in the soaring cost of health care.<\/p>\n\n\n\n

As a physician and professor studying the intersection of business and health<\/a>, I know that the challenges in reforming the sprawling U.S. health care system are immense. That\u2019s partly for political<\/a> and even philosophical reasons<\/a>.<\/p>\n\n\n\n

But it also reflects a complex system fraught with competing interests<\/a> \u2013 and the fact that patients, hospitals, health insurance companies and drug manufacturers change their behaviors in conflicting ways when faced with new rules.<\/p>\n\n\n\n

Soaring costs<\/h2>\n\n\n\n

U.S. health care is the most expensive in the world<\/a>, and according to a poll published in late January 2026, two-thirds of Americans are very worried about their ability to pay for it<\/a> \u2013 whether it\u2019s their medications, a doctor\u2019s visit, health insurance or an unpredictably costly medical emergency.<\/p>\n\n\n\n

Disputes over health policy even played a central role<\/a> in the federal government shutdown in fall 2025.<\/p>\n\n\n\n

Trump\u2019s health care framework outlines no specific policy actions<\/a>, but it does establish priorities to address a number of longtime concerns, including prescription drug costs<\/a>, price transparency<\/a>, lowering insurance premiums and making health insurance companies generally more accountable.<\/p>\n\n\n\n

Why have these challenges been so difficult to address?<\/p>\n\n\n\n

Drug price sticker shock<\/h2>\n\n\n\n

Prescription drug costs in the U.S. began rising sharply in the 1980s<\/a>, when drugmakers increased the development of innovative new treatments for common diseases<\/a>. But efforts to combat this trend have resembled a game of whack-a-mole because the factors driving it are so intertwined.<\/p>\n\n\n\n

One issue is the unique set of challenges that define drug development. As with any consumer good, manufacturers price prescription drugs to cover costs and earn profits. Drug manufacturing, however, involves an expensive<\/a> and time-consuming development process<\/a> with a high risk of failure<\/a>.<\/p>\n\n\n\n

Patent protection is another issue. Drug patents last 20 years<\/a>, but completing costly trials necessary for regulatory approval takes up much of that period, reducing the time when manufacturers have exclusive rights to sell the drug. After a patent expires, generic versions can be made and sold for significantly less, lowering the profits for the original manufacturer. Though some data challenges this claim<\/a>, the pharmaceutical industry contends<\/a> that high prices while drugs are under patent help companies recover their investment, which then funds the discovery of new drugs. And they often find ways to extend their patents<\/a>, which keeps prices elevated for longer.<\/p>\n\n\n\n

Then there are the intermediaries. Once a drug is on the market, prices are typically set through negotiations with administrators called pharmacy benefit managers<\/a>, who negotiate discounts and rebates on prescription drugs for health insurers and employers offering benefits to their workers. Pharmacy benefit managers are paid based on those discounts, so they do not have an incentive to lower total drug prices, though new transparency rules enacted Feb. 3<\/a> aim to change payment practices. Drugmakers often raise the list price<\/a> of drugs to make up for the markdowns<\/a> that pharmacy benefit managers negotiate \u2013 and possibly even more than that<\/a>.<\/p>\n\n\n\n

In many countries, centralized government negotiators set the price for prescription drugs, resulting in lower drug prices. This has prompted American officials to consider using those prices as a reference<\/a> for setting drug prices here. In its blueprint, the Trump administration has called for a \u201cmost-favored nation\u201d drug pricing policy<\/a>, under which some U.S. drug prices would match the lowest prices paid in other countries.<\/p>\n\n\n\n

This may work in the short term, but manufacturers say it could also curtail investment in innovative new drugs<\/a>. And some industry experts worry that it may push manufacturers to raise international prices<\/a>. <\/p>\n\n\n\n

In late 2025, 16 pharmaceutical companies<\/a> agreed to most-favored nation pricing for some drugs. Consumers can now buy them directly from manufacturers through TrumpRx<\/a>, a portal that points consumers to drug manufacturers and provides coupons for purchasing more than 40 widely used brand-name drugs at a discount, which launched Feb. 5. However, many drugs available through the platform can be purchased at lower prices as generics<\/a><\/p>\n\n\n\n

Increasing price transparency<\/h2>\n\n\n\n

Fewer than 1 in 20 Americans know how much health care services will cost<\/a> before they receive them. One fix for this seems obvious: Make providers list their prices up front. That way, consumers could compare prices and choose the most cost-effective options for their care.<\/p>\n\n\n\n

Spurred by bipartisan support in Congress<\/a>, the government has embraced price transparency<\/a> for health care services over the past decade. In February 2025, the Trump administration announced stricter enforcement<\/a> for hospitals, which must now post actual prices, rather than estimates, for common medical procedures. Data is mixed on whether the approach is working as planned, however. Hospitals have reduced prices for people paying out of pocket, but not for those paying with insurance<\/a>, according to a 2025 study.<\/p>\n\n\n\n

For one thing, when regulations change, companies make strategic decisions to achieve their financial goals and meet the new rules \u2013 sometimes yielding unintended consequences. One study found, for example, that price transparency regulations in a series of clinics led to an increase in physician charges to insurance companies<\/a> because some providers who had been charging less raised their prices to match more expensive competitors.<\/p>\n\n\n\n

Additionally, a 2024 federal government study found that 46% of hospitals were not compliant<\/a>. The American Hospital Association, a trade group, suggested price transparency imposes a high administrative burden<\/a> on hospitals while providing confusing information to patients, whose costs may vary depending on unique aspects of their conditions. And the fine for noncompliance, US$300 per day, may be insufficient to offset the cost of disclosing this information<\/a>, according to some health policy experts.<\/p>\n\n\n\n

Beyond high costs, patients also worry that insurers won\u2019t actually cover the care<\/a> they receive. Cigna is currently fighting a lawsuit accusing its doctors of denying claims almost instantly \u2013 within an average of 1.2 seconds<\/a> \u2013 but concerns about claims denial are rampant across the industry. Companies\u2019 use of artificial intelligence to deny claims<\/a> is compounding the problem.<\/p>\n\n\n\n

\"Two
Fewer than 1 in 20 Americans know how much health care services will cost before they get them. FS Productions\/Tetra Images via Getty Images<\/a><\/figcaption><\/figure>\n\n\n\n

Curbing the rise in health insurance premiums<\/h2>\n\n\n\n

Many Americans struggle to afford monthly insurance premiums<\/a>. But curbing that increase significantly may be impossible without reining in overall health care costs and, paradoxically, keeping more people insured.<\/p>\n\n\n\n

Insurance works by pooling money paid by members of an insurance plan. That money covers all members\u2019 health care costs, with some using more than they contribute and others less. Premium prices therefore depend on<\/a> how many people are in the plan, as well as the services insurance will cover and the services people actually use. Because health care costs are rising overall, commercial insurance companies may not be able to significantly lower premiums<\/a> without reducing their ability to cover costs and absorb risk.<\/p>\n\n\n\n

Nearly two-thirds of Americans under age 65<\/a> receive health insurance through employers. Another 6.9% of them get it through Affordable Care Act marketplaces<\/a>, where enrollment numbers are extremely sensitive to premium costs.<\/p>\n\n\n\n

Enrollment in ACA plans nearly doubled in 2021<\/a>, from about 12 million to more than 24 million, when the government introduced subsidies to reduce premiums during the COVID-19 pandemic. But when the subsidies expired<\/a> on Jan. 1, 2026, about 1.4 million dropped coverage<\/a>, and for most who didn\u2019t, premiums more than doubled<\/a>. The Congressional Budget Office projects that another 3.7 million will become uninsured<\/a> in 2027, reversing some of the huge gains<\/a> made since the ACA was passed in 2010.<\/p>\n\n\n\n

When health insurance costs rise, healthier people may risk going without<\/a>. Those who remain insured tend to need more health services, requiring those more costly services to be covered by a smaller pool of people and raising premium prices even higher.<\/p>\n\n\n\n

The Trump administration has proposed routing the money spent on subsidies directly to eligible Americans to help them purchase health insurance. How much people would receive is unclear, but amounts in previous proposals<\/a> wouldn\u2019t cover what the subsidies provided.<\/p>\n\n\n\n

To sum it up, health care is extremely complicated and there are numerous barriers to reforms, as successive U.S. administrations have learned over the years. Whether the Trump administration finds some success will depend on how well the policies are able to surmount these and other obstacles.<\/p>\n\n\n\n

Patrick Aguilar<\/a>, Managing Director of Health, Washington University in St. Louis<\/a><\/em><\/p>\n\n\n\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Patrick Aguilar, Washington University in St. Louis In announcing its \u201cGreat Healthcare Plan\u201d in January 2026, the Trump administration became the latest in a long history of efforts by the U.S. government to rein in the soaring cost of health care. As a physician and professor studying the intersection of business and health, I know […]<\/p>\n","protected":false},"author":56,"featured_media":41800,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,826,46,42,827,295,10,25,296,36,27,4],"tags":[885,891,886,860],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/41799"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=41799"}],"version-history":[{"count":2,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/41799\/revisions"}],"predecessor-version":[{"id":41842,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/41799\/revisions\/41842"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/41800"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=41799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=41799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=41799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}