Why Are Medical Bills So Expensive? Here’s a Breakdown


It’s a well-known fact that medical bills are expensive. The high costs are frustrating to many people, and understandably so. However, when you break down the individual factors that go into determining medical costs, it becomes easier to understand and a little less frustrating.

Facilities Can Be Really Expensive

Medical facilities, including hospitals, surgery centers, labs, outpatient clinics, and doctors’ offices, are expensive to maintain. Utility bills alone can cost thousands of dollars a week. Janitorial supplies and staff are another expense that people sometimes forget to factor into costs. Additionally, as buildings age, they require renovations and restorations. For example, roofs and floors need to be replaced occasionally, and plumbing and electrical work require updating.

There Are a Lots of People to Pay

Doctors and nurses aren’t the only ones getting paid. There are also people behind the scenes taking charge of decision-making and budgeting that you might not ever see during a hospital visit. For example, the administrative staff makes up a huge part of the healthcare workforce. In fact, the United States spends over $200 billion in administrative costs every year.

Don’t forget about laboratory technicians, pharmacists, therapists and the many others who play an important role in making sure people get the best medical treatment possible.

The Cost of Diagnostic Tests Adds Up

Diagnostic tests are an important but often expensive part of most medical bills. Bloodwork costs can vary widely depending on the complexity of the lab test required. A simple test may cost less than $100 while a complex one may be upwards of $3,000 and sometimes much more. Many people require a series of tests, which can greatly impact their cost of care.

Medication is Expensive

Medication costs can add up quickly. It’s not unusual for a new drug for treating a serious illness to cost over $100,000. While older drugs are often less expensive, this isn’t always the case. Even generics that have been around for years can get costly, especially if you require multiple treatments. Simply put, medication costs are high and a big contributing factor to the cost of medical bills.

Final Thoughts

Medical costs are expensive. While it’s frustrating to pay these costly bills, knowing what goes into determining the cost of your medical treatment is helpful. Keep in mind that your medical costs go far beyond your doctor’s salary. There are also facility fees, lab tests, and medication costs to consider. Due to rising costs, more and more providers are moving to one-on-one health concierge advocacy and fee-based models of care. Ultimately, it’s important to understand your options and what you’re paying for as a healthcare consumer.

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