The United States spends roughly $12,000 per person per year on healthcare. Germany spends about $7,000. Canada spends about $5,500. Japan spends about $4,800. Americans pay more than any other wealthy country and get worse outcomes on most major health metrics: lower life expectancy, higher infant mortality, worse rates of chronic disease management. The cause is structural. The American healthcare system routes money through multiple layers of private companies, each extracting profit, before any of it reaches actual care. Somewhere between what you pay and what your doctor receives, a significant portion disappears into insurance overhead, pharmaceutical markups, and hospital billing departments.

The Drug Pricing Problem

A vial of insulin costs about $3 to $6 to manufacture. In the United States, that same vial retails for $300 or more. In Canada, it's around $30. In Australia, under $10. The drug is identical. The patents, in most cases, have expired. The price difference is policy.

American law, until very recently, prohibited Medicare from negotiating drug prices with pharmaceutical companies. That prohibition wasn't written into law by accident. PhRMA, the pharmaceutical industry's lobbying group, spent over $370 million on lobbying in the two years before the Inflation Reduction Act passed in 2022, fighting the limited negotiating authority that bill ultimately granted. The result of decades of that lobbying is a pricing system where drug companies charge whatever the market will bear in the United States while accepting regulated prices in every other wealthy country.

Insulin is the most visible example, but the pattern runs across thousands of drugs. Americans with cancer pay multiples of what patients in Europe pay for the same treatments. The extra cost doesn't fund additional research. Pharmaceutical companies spend more on stock buybacks and executive compensation than on R&D. The gap between what Americans pay and what those drugs cost elsewhere is profit, extracted from sick people because the law allows it.

The Insurance Layer

Private health insurance adds a substantial administrative burden that other countries don't carry. American hospitals and medical practices employ large billing and coding departments, staffed specifically to navigate the requirements of dozens of different insurance plans. Insurance companies employ claims reviewers, prior authorization staff, and denial specialists. Estimates suggest that healthcare administration consumes somewhere between 25 and 34 cents of every dollar spent on healthcare in the United States, compared to about 12 cents in Canada's single-payer system.

Insurance companies deny claims as a business strategy. When a claim is denied, the insurer keeps the premium. Many denied claims are never appealed, so the denial sticks even when it shouldn't, and insurance companies have built their models around that pattern. UnitedHealth Group, the largest health insurer in the country, reported over $22 billion in profit in 2023 while its subsidiary Optum deployed AI systems that internal documents suggested were designed to issue claim denials systematically.

Prior authorization, the requirement that doctors get insurer approval before prescribing certain treatments or performing procedures, has expanded dramatically over the past decade. Doctors report spending hours per week on prior authorization paperwork that delays or prevents care. Patients die waiting for approvals that insurers eventually grant or that come too late.

The Middlemen Nobody Asked For

Between drug manufacturers and pharmacies sits another layer: pharmacy benefit managers, or PBMs. The three largest, CVS Caremark, Express Scripts, and OptumRx, manage prescription drug benefits for most Americans with insurance coverage. They negotiate with drug manufacturers, set formularies, and process claims.

PBMs were originally meant to use their purchasing power to lower drug prices. Instead, they developed a business model that profits from the complexity they're supposed to simplify. They collect rebates from drug manufacturers in exchange for favorable placement on formularies. They charge pharmacies fees that sometimes exceed the cost of the drugs. They keep a portion of the spread between what insurers pay for drugs and what they reimburse pharmacies. The FTC issued a major report in 2024 documenting how PBM practices drive up drug costs rather than reducing them.

A system that was supposed to lower costs through consolidation of purchasing power became another extraction layer, adding cost without adding care.

Hospital Consolidation

Over the past two decades, American hospitals have merged at a rapid pace. Independent community hospitals have been absorbed into large health systems. Physician practices have been acquired by hospitals, which then bill at higher hospital rates for services that used to be billed at lower physician rates.

Research on hospital mergers consistently shows the same pattern: prices increase substantially in markets where competition decreases, often by 20 to 40 percent, with no corresponding improvement in quality. When the only hospital system within a reasonable drive is the one that just acquired three of its former competitors, it can set prices and insurers have limited options to push back. Patients have no options at all.

Who Made These Rules

Pharmaceutical companies, insurance corporations, PBM operators, and hospital systems are among the largest political donors in the country. The pharmaceutical and health products industries spent over $370 million lobbying Congress in 2021 and 2022 alone. Insurance companies and managed care organizations add hundreds of millions more. Hospital associations spend heavily at both the state and federal level.

That money buys specific outcomes. Medicare negotiating drug prices was blocked for nearly two decades before a partial measure finally passed. Meaningful insurance regulation consistently stalls or gets watered down. Hospital merger reviews under antitrust law have been historically weak.

Both parties take this money. The result, across decades of both parties holding power, is a system that generates enormous profits for a small number of corporations while leaving about 100 million Americans carrying medical debt and roughly 25 million without any insurance coverage at all.

What the Political Connection Means

Healthcare costs are the most cited financial stress in American household surveys. The inability to afford care, or the fear of what a serious illness would cost, shapes decisions about jobs, housing, and risk-taking in ways that constrain ordinary people's lives. Rationing insulin, avoiding a doctor visit, taking on debt to pay a hospital bill: these are the predictable outcomes of a political system that answers to the industries profiting from high prices, and they fall on people who had no part in designing the system.

Changing who politicians answer to is a prerequisite for changing the outcomes. That's the argument the Labor Party is making, and it's the reason the party's commitment to zero corporate donations matters in healthcare as much as in any other area of policy.

Learn more at votelabor.org.