Cost of Health Care

Why Is Healthcare So Expensive?

If you wonder why healthcare costs so much, you'll find answers here. And if you're looking for ways to keep from spending so much on your healthcare, we may have some useful tips for you.

Defensive Medicine

Defensive medicine refers to the way healthcare providers order procedures and tests - not to ensure the health of the patient but as a safeguard against possible malpractice liability. A driving force behind defensive medicine is the healthcare provider's fear of being sued.

Fear of the cost of legal action results in costly, additional, unnecessary services healthcare providers may order to show they're practicing according to certain standards, so that if, in the future, someone takes court action, the liability can be pre-empted.

Medical tests

Some patients request more medical tests than they need - especially when they aren't paying out-of-pocket for them. But since health insurance companies and employers are paying for these tests, the costs go up in response to the demand.

What can you do about expensive medical tests?

Reforms to the malpractice system could reduce the fear of liability that can lead doctors to order more tests and procedures than you need. You can ask your elected officials to support reforms in the malpractice system that help lower these costs.

Ask your doctor what's really needed. We used to simply call them X-rays - pictures or "images" of the inside of certain parts of the body, like the chest, neck, or back. Today, diagnostic imaging studies have expanded to include a broad range of procedures.

Through the use of advanced technology and equipment, the images give doctors a much more detailed picture of specific areas of the body. But why pay for an MRI or a CT scan if it's not necessary. Some experts agree that imaging studies often are prescribed unnecessarily, raising healthcare costs by more than $16 billion a year.

Where are you having that test? You can save time and money by choosing a freestanding imaging center over a hospital-based center when your doctor orders tests or procedures. Often you'll have a lower copayment and coinsurance at a freestanding center than you'd pay at a hospital-based facility.

Healthcare expense breakdown

Learn more about how your healthcare dollar breaks down:

3 cents of every healthcare dollar goes to health insurers

Watch Healthcare Video: Why is Healthcare so Expensive?