David Cutler: Can the U.S. Healthcare System Be Fixed?

Interview from Harvard Magazine:

Marina Bolotnikova: First, why does healthcare cost so much in the United States? Nearly 50% more per capita than in Switzerland, which spends the second most among wealthy nations.

David Cutler: Yeah, one of the continual vexing points about U.S. healthcare is why it’s so expensive. There are a few reasons why the U.S. spends more than other rich countries. Obviously, in poor countries, there’s an enormous difference in the nature of medical care. Relative to other rich countries, I would say there are three principle reasons why the U.S. spends more. The first is that it’s administratively much more costly. So we have lots of people involved in submitting bills, and adjudicating claims and figuring out what services someone is allowed to receive and not allowed to receive and what you need to do in order to receive those services. And all of that involves people, and people are very expensive. And so probably the biggest contributor to the higher spending in the U.S. is that.

More here.