[jyl]

I am not a doctor. I have discussed this topic with doctor friends. And part of my job is investing in the healthcare sector. So based on that:

1. Healthcare is a for profit industry in the US, so our national healthcare spending must include that profit margin. Healthcare is actually one of the most profitable industry sectors.
2. Doctors earn substantially more in the US than in, say, most European countries. Other persons involved in health care may earn more as well, but I think the disparity is greatest for doctors.
3. Doctors and other health care providers are usually paid by the procedure, rather than by the patient or by the disease. This creates an incentive to perform more procedures; at the least, there is no incentive to perform fewer procedures. Litigation and the resultant "defensive medicine" is also an incentive to perform more tests in the US.
4. Insurance claims processing and all the associated administrative costs and insurer profits eat up a substantial portion of healthcare spending. One estimate I have heard is 25%.
5. Expensive branded drugs, where there is no generic substitute, cost much more in the US than in Europe. Often 1/3 more. This is even though it is the identical drug sold by the same company (often a US company). I do not know if Americans also pay more for medical devices, equipment, etc.
6. Americans tend to receive more expensive, high technology tests and procedures. Interestingly, some of my doctor friends state that much of this expensive care does not actually improve patient outcomes.

I don't know if the above are in any logical order.