Navigating Health Care Pt II: Cost, Complexity, and Personal Responsibility

One of the central challenges in U.S. healthcare is understanding how we spend so much on it—and, more personally, how individuals can best pay for it. At its core, the healthcare system is intended to care for people, yet it has become entangled in a web of financial incentives, inefficiencies, and administrative complexity.

In 2023, U.S. healthcare spending accounted for approximately 17.6% of GDP, or $4.9 trillion. With such a large pool of money involved, it's no surprise that many people are drawn to the industry—and not always for the right reasons. Fraud, waste, and abuse are estimated to account for nearly 30% of total healthcare spending. To put it in perspective, imagine a grocery store losing one-third of its inventory to theft; prices would skyrocket, or the store would go out of business.

According to the American Journal of Public Health, 66.5% of personal bankruptcies are at least partially caused by medical expenses. That alone should signal a deep systemic issue.

How Much Are We Spending?

The U.S. spends about $14,570 per person annually on healthcare. Most people don’t realize this because much of the cost is hidden through third-party payers like insurance companies. Over a lifetime, the average healthcare expenditure is $316,600—with women averaging $361,200 and men $268,700, largely due to longer female life expectancy.

Roughly 10% of healthcare spending occurs in the last year of life, further highlighting the system’s inefficiencies.

What Is Healthcare?

There is no universally agreed-upon definition of healthcare in the U.S., especially when it comes to politically and ethically contentious services like gender-affirming care or abortion. The debate often centers around who should pay: the individual or the collective (i.e., taxpayers)?

It’s important to remember that the U.S. government operates on a budget. Funding more healthcare services means cutting resources elsewhere—defense, education, infrastructure, etc. This dilemma fuels ongoing ethical debates and keeps ethicists in business.

Even AI-generated definitions vary. ChatGPT defines healthcare as “the support and services people receive to stay healthy, treat disease, and improve well-being.” Put simply: “taking care of people’s health.”

My personal belief is this: if you are capable, the primary responsibility for your health rests with you. Like any industry, the more you outsource, the more you pay. As JFK said, “Ask not what your country can do for you—ask what you can do for your country.”

The Problem with Pricing

In most consumer markets, prices are visible before purchase. In healthcare, that’s rarely the case. Patients may know their co-pay but are usually unaware of what their insurance is billed—or whether their provider is in- or out-of-network.

Even though laws now require healthcare price transparency, actual costs remain elusive unless you’re paying cash. For most Americans, the process looks like this:

1. Walk into a doctor’s office and pay your co-pay.

2. Receive care.

3. Leave with lab orders, imaging, or prescriptions.

4. Get multiple surprise bills weeks later—often without prior knowledge of cost.

To make matters worse, most Americans lack $500–$1,000 in savings, making these surprise medical bills financially destabilizing.

Doctors are not taught about pricing during training. I only learned these realities after residency when patients started asking about costs—and I couldn’t answer.

The Role of RVUs

In large medical systems, physicians are often paid based on Relative Value Units (RVUs)—a system disconnected from actual dollar amounts. RVUs are negotiated between CMS (Centers for Medicare & Medicaid Services) and lobbying organizations like the American Medical Association.

Private insurance companies generally follow CMS’s lead in determining reimbursement rates, but the complexity of this system further distances providers from understanding the financial implications of their care.

What About Insurance?

Insurance isn’t inherently bad. Its original purpose was to pool risk and prevent catastrophic loss. However, health insurance today often functions more like a discount card, offering reduced prices rather than true financial protection.

Many people don’t meet their deductibles each year. In such cases, cash-based services may be cheaper, especially when you avoid the bureaucracy of the insurance system. Greater complexity almost always means higher costs—for everyone.

Who’s to Blame?

This is the wrong question. There’s no single culprit.

The Swiss cheese model—where multiple small flaws align to cause failure—applies perfectly here. Rising administrative costs correlate strongly with rising healthcare expenditures. Every additional layer of bureaucracy adds people who must be paid, which increases costs for the consumer.

Who shares the blame?

• Hospitals and health systems

• Physicians

• Pharmaceutical companies

• Insurance companies

• Consumers

• Government

In short, everyone contributes to the current state of dysfunction.

What Can You Do?

At a minimum, reflect on how you consume healthcare. Understand that the system, while filled with good intentions, is still a business. Even I benefit financially by seeing more patients, so it’s important to acknowledge conflicts of interest.

Here's what you can do:

• Educate yourself on how the system works (that’s the point of this blog series).

• Consider cash-based pricing for non-catastrophic care—it’s often cheaper and more transparent.

• Insure against catastrophe, but define what “catastrophe” means to you.

• Use a fee-only health insurance advisor, not a commissioned salesperson.

• Clarify your healthcare goals: Are you aiming for disease prevention, longevity, symptom management, or quality of life? Each goal requires a different approach.

What I’m Doing About It

I left the traditional medical system because it no longer aligned with how I believe medicine should be practiced. This blog is my way of democratizing health education, especially since our public education system has failed to prepare people for healthcare decision-making in adulthood. I really love the United States and I'm proud to serve it. I still believe that despite our flaws we are the land of opportunity. The industry I serve in is putting our country in a tenuous economic situation and I hope this changes, fast.

My mission is to help people learn how to be functional adults within the current system. You can’t play the game well until you understand the rules.