Healthcare spending in the U.S. stands at around $3.5 trillion per year and accounts for about 18% of the national gross domestic product of the country. Since 2000, total healthcare spending has surged by more than 150%, which partially reflects the 15% increase in the population in that time. But given that the ratio of healthcare spending to GDP has gone up by a much faster rate (a 34% increase since 2000), there’s no doubt that healthcare is simply getting more expensive in the U.S. than it was in the past, even accounting for the population and economic changes that have taken place in the past two decades.
The great and growing cost of healthcare remains a central concern for the average American, and the 2020 presidential election is shaping up to be a referendum on how the country pays for medical care in the first place.
Anybody who’s had a surprise hospital visit or even a planned surgery is likely to get serious sticker shock the moment they open their bill, and disturbingly large percentages of the population avoid medical care in the first place because they fear they won’t be able to afford it, even with health insurance. Upwards of 1.5 million Americans will leave the country to seek healthcare in places around the world this year, and that number is expected to increase by about 25% a year over the next decade.
These so-called medical tourists find it necessary to leave the country to find more affordable options for cosmetic surgery, dental procedures, cancer treatments, weight loss and many other types of treatments. It’s easy to understand why. After all, a surgery, like a knee replacement, that costs $45,000 in the U.S., might be as cheap as $23,000 in India. But prices also vary widely (shockingly, perhaps) even within the United States.
We wanted to take a look at the variable costs of hospital visits, different categories of care and even specific procedures from state to state.
Costs & Spending Overall
The average person with private health insurance spent more than $5,640.78 on healthcare in 2017, including procedures, medication and hospitalization, according to the Health Care Cost Institute, which analyzes healthcare spending across the U.S. Costs are on the upswing, as the average amount spent per person has gone up nearly 17% since 2013. The biggest chunk of that spending was for professional services, such as anesthesia, specialist visits and surgical services.
All of those categories saw double-digit increases between 2013 and 2017, but prescription drug spending led the way with an increase of well over a quarter.
Who spends the most?
The two newest states are at either end of the spectrum when it comes to overall spending. Alaskans spend the most ($7,469), and residents of Hawaii spend the least ($3,626).
In every state, this number has risen by at least 10% since 2013, but some states have seen the figure jump dramatically.
The most expensive category overall, professional services, accounts for about a third of annual spending for the average American, but this figure accounts for more than half the total spending in Alaska and close to that in a handful of other states.
Understanding the variations in surgical and other procedure costs throughout the country means understanding how much we spend on all inpatient and outpatient services. On a national level, spending on inpatient services accounts for about 19%, while outpatient services draw about 30%, and a majority of surgeries today are done on an outpatient basis.
Nearly 6 in 10 dollars spent on healthcare in West Virginia in 2017 went to inpatient and outpatient services, the highest level in the country, followed by Indiana at 58.6%. These percentages largely track with each state’s total spending on inpatient and outpatient services.
Common Surgeries & Costs
The most common procedure done during inpatient stays is a cesarean section, with well over 1 million C-sections performed in the U.S. each year. The second-most common is another birth-related procedure, circumcision, which is also performed more than 1 million times per year. Likely thanks to our aging population, knee replacement is the most common non-childbirth related surgery in the U.S.
As one might expect, even these very common surgeries carry widely variable prices across the country, with some procedures showing huge variations within the same state — and the same city.
Because it’s the most common inpatient surgery in the U.S., let’s take the C-section as an example. In Knoxville, a C-section runs just $4,556, but the same procedure in San Francisco costs nearly five times as much, $20,721.
Even within the same city, prices can range wildly. For example, in the Boston metro area, the lowest end of the range is $5,739 and the high end is $23,836, a gulf of $18,097.
Many of us can’t afford to just hop on a plane to get a surgery, but for those who can, medical tourism is a very real and growing trend among Americans. The most common destinations for U.S. medical tourists include South and Central America and the Caribbean. The potential savings are dramatic.
We often don’t have much choice about where we have medical procedures. In the case of an emergency, we don’t want to worry about how much it will cost to save our life or the life of a loved one. But the truth is that cost does matter because our economy (and the rest of us) are spending an incredible amount on healthcare with seemingly no end in sight.
Seeing the cold, hard stats on what we’re spending and how variable it is should be enough to at least spark the average person to take a closer look at the next statement they get from their doctor.
About This Story
Throughout this story, we’ve linked directly to the data sources where we got our information, but it may be helpful to provide further explanation for a couple of them.
Most of our data, including state rankings on how much people spend, came from the Health Care Cost Institute, an independent nonprofit research organization that regularly publishes in-depth data from private insurance providers. We recognize that not every American is covered by private health insurance, but that does represent the majority of Americans overall and an even larger share of those who are insured at all. Our data came from a report published this year that covers a period from 2013 to 2017.
To calculate the difference between the U.S. cost and the typical cost for surgeries outside the U.S., we consulted information from Indus Health, a company that provides medical travel program administration for corporate health insurance plans.
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