Next year, commercial healthcare costs in the U.S. are projected to grow by 9% - the largest increase in nearly two decades, according to PWC. This could push U.S. healthcare spending to 6.3 trillion or more. Healthcare is bankrupting our nation. Although every major player in healthcare, from doctors and hospitals to health insurance companies, “big pharma,” pharmacy benefit managers (PBMs), and private equity groups, decry rising costs, each points the finger at someone else. In truth, all share responsibility.

The dilemma reminded me of a 2008 “Oxford-style” debate on the merits of universal health coverage. It featured Paul Krugman (then a Princeton professor and columnist for the New York Times), Michael Rachlis (a doctor and health policy analyst at the University of Toronto) and me on one side, and Michael Cannon (the Cato Institute’s director of health policy studies), Sally Pipes (president and CEO of the Pacific Research Institute) and John Stossel (then an ABC News commentator) on the other.

My two colleagues and I spoke in favor of the proposition, “Universal health coverage should be the federal government’s responsibility.” The other side spoke against.

In his opening statement, Stossel invoked a provocative metaphor for universal healthcare—the Trabant, East Germany’s iconic Cold War-era automobile. Powered by a smoky, two-stroke engine, it did not survive the fall of the Berlin Wall. “This,” Stossel opined, “is what planned economies and universal coverage get us. I don’t want this kind of healthcare.”

Stossel neglected to mention that communist East Germany was as different from capitalist West Germany as the Trabant was from the Porsches, BMWs and Mercedes that rolled off West German assembly lines. Yet West Germany (then) and Germany (today) provide universal healthcare coverage. So does every other high-income nation, except the United States.

A few days later, Stossel’s metaphor prompted me to wonder: if American healthcare were a motor vehicle, which one would it be?

In 2008, the answer was obvious – the Hummer.

In its time, the Hummer and its successor, the Hummer H2, were considered the ultimate status symbols of rugged American freedom. Not everyone was impressed. Consumer Reports noted that “The Hummer gets awful fuel economy, handling is ungainly, the brakes are subpar, and a terrible view out makes it difficult to judge the vehicle’s hulking position within a traffic lane.”

GM stopped producing Hummers in 2010, but the brand returned in late 2021 as an ultra-powerful, all-electric “super truck” with a 6-figure price tag.

American healthcare is the most expensive in the world – by far. We spend 2.5 times the median per capita among the 38 nations of the Organization for Economic Co-operation and Development ( OECD ). We devote more government funding (as a share of GDP) to healthcare than the government-run or funded health systems in the U.K., Canada, Sweden, Norway, and several other high-income countries, as noted in a recent Washington Post editorial. Despite such lavish spending, 27 million Americans, 8 percent of our population, are uninsured and tens of millions more have flimsy coverage that requires cash copayments and costly deductibles. The number of uninsured will sharply rise when the Medicaid cuts mandated by the “One Big Beautiful Bill Act” take effect after the midterms.

High healthcare spending hurts our economy in many ways. It drives federal budget deficits, crowds out state spending on education and other priorities, harms the competitiveness of American companies and devours the earnings of middle-class families. More than half of working-age Americans struggle with health care costs.

What Do We Get For Our Money?

Not much. Despite high spending, the U.S. has the poorest health outcomes of any high-income country. It also ranks near the bottom among all high- and middle-income nations in the Organization for Economic Co-operation and Development (OECD). Although U.S. life expectancy recently reached an all-time high , it’s five years lower than in Switzerland, Japan, and Spain, and two years lower than the OECD average. “Lack of universal coverage, weak primary care infrastructure, high out-of-pocket costs, and a complex insurance system contribute to and exacerbate the nation’s uniquely poor performance relative to its peers,” according to the Commonwealth Fund .

Why Are We A Global Outlier?

W. Edwards Deming coined the phrase, “Every system is perfectly designed to get the results it gets.” This is certainly true of American healthcare. Unlike other high-income countries , which designed their health insurance systems to cover everyone, the U.S. created a largely voluntary, employer-centered private insurance system during WWII. Medicare and Medicaid were enacted in 1965, and the Affordable Care Act was passed in 2010. The size, complexity of political clout of America’s “healthcare industry,” coupled with its focus on constantly growing revenue, makes it highly resistant to change.

Unfortunately, Congress spends too much time fighting over how to pay for healthcare, rather than working to make it more accessible, effective, and affordable. We can and must do better .

“Hummer healthcare”—big, bulky, and historically inefficient—is bankrupting our nation. Rather than refinancing the loan or undertaking another round of inadequate repairs, it’s time for a trade-in. There are plenty of options on the showroom floor.