Overview

This course delves into the complex forces driving the high cost of US healthcare, offering a deep dive into why the system is both costly on a macro level and burdensome for individuals. You’ll explore how factors such as high prices, intensive service use, and system inefficiencies contribute to soaring expenditures. By comparing the US system with those in England and Germany, the course highlights how governance, financing, and resource allocation strategies can help contain costs while still providing high-quality care. Throughout the course, you will gain a nuanced understanding of the interplay between healthcare prices and utilization. You’ll learn how differences in system design—such as clear boundaries, integrated care models, and regulatory frameworks—shape outcomes and impact overall spending. By examining real-world data and case studies, you’ll be equipped to critically assess policy interventions and consider reforms that might offer a “least worst” solution for controlling costs. Join us to unravel the intricacies of healthcare economics and discover practical insights for navigating and potentially reforming the US healthcare landscape.

Syllabus

Defining Expensive - Unpacking the Cost of U.S. Healthcare

Module 1 introduces the challenge of understanding why US healthcare is expensive. It explains that “expensive” means both high overall spending and a heavy financial burden on patients. The module compares US costs and outcomes with other high-income countries, showing that while high prices and complex billing systems play a role, factors like population aging don't fully explain the disparity. This sets the stage for exploring the internal, system-based drivers of these high costs.

The Price-Utilization Puzzle

Module 2 explores how high prices and intensive service use drive the cost of US healthcare. It examines differences in pricing for inpatient, outpatient, and pharmaceutical services, highlighting variations between private and public insurers. The module also explains that, even with fewer visits, each episode of care in the US is more service intensive—incorporating more complex and expensive treatments—compared to other countries.

System Dynamics for Cost Control

Module 3 examines how the health systems in England and Germany are designed to control healthcare costs by influencing patterns of price and utilization. It explains how these countries use system dynamics—through governance, financing, resource generation, and service delivery—to set up defenses that contain high prices and excessive service use. The module explores the trade-offs and goals behind these designs, such as achieving universal coverage and the triple aim in England and using corporate self-governance to balance cost and access in Germany

Uncontained Forces in U.S. Healthcare

Module 4 revisits the question of why US healthcare is so costly by examining the design features and systemic forces that limit cost containment. This module contrasts the US system’s open and fragmented boundaries with the more regulated frameworks of Germany and England. It analyzes how employer-sponsored insurance and Medicare employ market-based strategies, managed care, and cost sharing to control utilization—yet these approaches fall short of curbing high prices and the intensity of care within each episode. By focusing on the special protection of the doctor–patient relationship, the complexity of multiple financing streams, and the regulatory strategies in Medicare, the module demonstrates that despite efforts to limit care episodes, the US health system remains vulnerable to strong cost-driving forces. Ultimately, it challenges learners to consider whether the current high expenditure is the “least worst” outcome given these systemic constraints.