In the US malpractice insurance is mostly orthogonal to the costs of health care. I hate having to write the check every year (my wife- a pharmacist- needs this insurance just like doctors do, though it doesn't cost as much because suits aren't as common) but it's really just an annoying drop in the bucket. You can tell this because some states (most prominently, Texas) have put caps on malpractice pain-and-suffering payouts, and they don't have lower medical costs, in fact parts of Texas are some of the most expensive in the country. So if malpractice isn't driving it, what is?
As far as I can tell, the real reason for the costs are consolidation. In my wife's world, independent pharmacies are being killed by PBM's(1) which literally set reimbursement rates for the small guys at below the wholesale cost of the medicine. The user experience here is you go to an independent pharmacy, you hand them your script, and they run the script through their computer systems, then say "Sorry, I can't fill this for you, because it cost me more than the insurance will pay me" and then you have to go to one of the big three which have enough market power to negotiate with their PBM's for higher rates (and even here PBM's routinely end up at least temporarily dropping one of the big boys as part of their hardball negotiations with each other).
There are basically three PBM's for the whole country, they have enormous, basically monopoly power (80% of the insurance market), and if you are a small shop your rates are crap. So the small pharmacies close/sell out and the big three drug stores get bigger. And that is happening in medicine as well, as I understand it, though I haven't seen it from the inside.
The core idea behind the ACA ("Obamacare") was that clear competition from insurance companies (and medical providers) through the exchanges would lower the total costs of health care, and it doesn't seem to have panned out, because there hasn't actually been much competition, instead there has been massive consolidation. Most counties in the US don't actually have much competition on their ACA Exchange(2), and most counties don't have much competition from medical providers either- they've all consolidated to get better rates from the insurance company- so you have monopoly insurance and monopoly providers competing with each other to see who gets more rents, not trying to compete on lowering costs.(3)
3: This is why many Democratic health care wonks are looking more seriously at single-payer over the past decade. If we in practice have unchecked monopolies dominating health care, let's at least have them be government run and therefore responsive to something, even if it's just politics it's still better than the alternative.
"Healthcare" is such a big term that covers so many things that really should be broken out separately so that it can be seen what's what.
Most people really only care about the amount of the insurance deduction, co-pays, and care availability; they don't know or care about the "behind the scenes" details.
The consolidation has been absolutely phenomenal in the last twenty years, and digging into exactly why each town could have an independent hospital and staff 20/30 years ago and why they're all being consolidated now.
So government intervention didn't do what it claimed, in fact the opposite, and the solution (per "Democratic health care wonks") is to...have more government intervention? The leaches didn't work to help your diabetes, so we should apply more leaches?
Things are far better than they were before the government intervention. The consolidation had started happening before the ACA was passed (e.g. Bill Frist and Rick Scott both became rich enough to be senators thanks to hospital consolidation in the 1980's and 1990's), and now that there are regulations the individual insurance market is passable rather than the continuous death spiral that it was in before.
And of course as I didn't say in that message but is obviously true, the ACA has led to far more people carrying health coverage than before. It's just that instead of the exchanges, it's the Medicaid expansion that has led to this. Even with Robert's unprincipled last minute rewrite and the 10 states that are still allowing their rural hospital system to be utterly gutted rather than giving Democrats the win, a higher percentage of people have health coverage than at any point in American history before the ACA, and that is entirely because of Obamacare. So that is why reinforcing the successful part (government insurance) and abandoning the failed part ("market reform") is so attractive.
The problem is that the health care market isn't a truly free market. Uwe Reinhardt, Princeton economist, wrote a lot about how it was a broken market, which is why every other developed country (including fairly libertarian states like Singapore and Chile) has significantly more government intervention than the US does- since it's not really much like a free market, unless you are willing to accept many, many more deaths for people like my mother, which I am not.
As far as I can tell, the real reason for the costs are consolidation. In my wife's world, independent pharmacies are being killed by PBM's(1) which literally set reimbursement rates for the small guys at below the wholesale cost of the medicine. The user experience here is you go to an independent pharmacy, you hand them your script, and they run the script through their computer systems, then say "Sorry, I can't fill this for you, because it cost me more than the insurance will pay me" and then you have to go to one of the big three which have enough market power to negotiate with their PBM's for higher rates (and even here PBM's routinely end up at least temporarily dropping one of the big boys as part of their hardball negotiations with each other).
There are basically three PBM's for the whole country, they have enormous, basically monopoly power (80% of the insurance market), and if you are a small shop your rates are crap. So the small pharmacies close/sell out and the big three drug stores get bigger. And that is happening in medicine as well, as I understand it, though I haven't seen it from the inside.
The core idea behind the ACA ("Obamacare") was that clear competition from insurance companies (and medical providers) through the exchanges would lower the total costs of health care, and it doesn't seem to have panned out, because there hasn't actually been much competition, instead there has been massive consolidation. Most counties in the US don't actually have much competition on their ACA Exchange(2), and most counties don't have much competition from medical providers either- they've all consolidated to get better rates from the insurance company- so you have monopoly insurance and monopoly providers competing with each other to see who gets more rents, not trying to compete on lowering costs.(3)
1: Pharmacy Benefit Managers, https://www.vox.com/2023/5/10/23709448/what-are-pbms-pharmac... for an explainer
2: https://www.vox.com/mischiefs-of-faction/2017/7/20/16005598/...
3: This is why many Democratic health care wonks are looking more seriously at single-payer over the past decade. If we in practice have unchecked monopolies dominating health care, let's at least have them be government run and therefore responsive to something, even if it's just politics it's still better than the alternative.