The United States spent $5.3 trillion on healthcare in 2024, or about $15,474 per person, consuming 18% of the entire economy. That figure grew 7.2% in a single year. Making healthcare more affordable requires changes at every level: how drugs are priced, how bills are processed, how care is delivered, and how individuals navigate the system. Some of these changes are already underway, and others depend on policy decisions still being debated. Here’s where the biggest opportunities exist.
Negotiate Drug Prices at Scale
Prescription drugs are one of the most visible costs in healthcare, and the U.S. has historically paid far more than other countries for the same medications. A major shift began with the Medicare Drug Price Negotiation Program, which allows the federal government to negotiate prices directly with pharmaceutical companies for the first time. The first round of negotiated prices takes effect in 2026 and covers drugs treating cardiovascular disease, diabetes, autoimmune conditions, and cancer. About 8.8 million Medicare Part D enrollees used these specific drugs in 2023 alone, and the negotiated prices are projected to save patients an estimated $1.5 billion in that first year.
This program only covers a handful of the most expensive drugs so far, and it only applies to Medicare. Expanding negotiation authority to cover more medications and more insurance markets would multiply those savings. Other countries routinely negotiate drug prices as a standard practice, which is a major reason their per-person healthcare spending is so much lower.
Cut Administrative Waste
The U.S. spends $925 per person per year on healthcare administration. Comparable wealthy countries spend $245. That gap of $680 per person accounts for about 12% of the total difference in healthcare spending between the U.S. and peer nations. Overall, administrative costs eat up 7.6% of U.S. health spending, double the 3.8% average in comparable countries.
Where does all that money go? Billing complexity is the biggest culprit. American hospitals and clinics employ large teams to navigate thousands of different insurance plans, each with its own rules for prior authorization, coding requirements, and claim submissions. Doctors spend hours on paperwork that doesn’t exist in countries with simpler payment systems. Standardizing billing codes, streamlining prior authorization (the process where insurers must approve a treatment before it’s covered), and reducing the sheer number of administrative steps in every transaction could free up tens of billions of dollars annually. Some of that is happening through regulation, but progress has been slow.
Invest in Chronic Disease Management
Chronic conditions like diabetes and high blood pressure are among the most expensive drivers of healthcare spending, largely because they lead to hospitalizations when poorly managed. A pilot program studied in China offers a useful model: when a local government introduced 50% reimbursement for outpatient medications for hypertension and diabetes, the reduction in hospital spending was nearly three times larger than the increase in outpatient drug costs. The net effect was a significant drop in total medical spending.
The savings were concentrated among the sickest patients. Those in the top fifth of medical spending before the program drove almost all of the reduction. This pattern holds broadly: helping the highest-cost patients stay on their medications and out of the hospital produces outsized returns. Programs that cover preventive medications at low or no cost, pair patients with care coordinators, and monitor chronic conditions between doctor visits consistently reduce expensive emergency care down the line.
Use Telehealth for Routine Care
One of the simplest ways to lower costs is to match the care setting to the problem. A Penn Medicine study found that telemedicine visits were billed an average of $400 less than equivalent in-person visits, with fewer follow-up appointments afterward. The average total charge per episode starting with a telehealth visit was $96, compared to $509 when the first visit was in person. For respiratory symptoms specifically, telehealth episodes cost roughly $800 less on average.
Telehealth won’t replace every office visit, but for straightforward concerns like rashes, cold symptoms, medication refills, and mental health check-ins, it eliminates travel time, reduces overhead for providers, and keeps people out of expensive urgent care clinics and emergency rooms. Policies that ensure telehealth visits are covered by insurance at the same rate as in-person visits help sustain this cost advantage for patients.
Enforce Price Transparency
Since 2021, hospitals have been required by federal rule to publish their prices in machine-readable files, letting patients (and employers, and insurers) compare costs before receiving care. The idea is straightforward: when prices are visible, competition can drive them down. But compliance has been uneven. An audit by the HHS Office of Inspector General found that 37 out of 100 sampled hospitals failed to fully comply with the rule, with 34 falling short specifically on publishing comprehensive pricing files.
Stronger enforcement, including meaningful financial penalties for noncompliance, would make this tool more useful. When transparency works, it gives patients leverage to shop for non-emergency procedures like imaging, lab work, and elective surgeries where prices can vary by thousands of dollars between facilities in the same city. Several online tools already aggregate this data where it’s available, but the information is only as good as what hospitals actually publish.
What You Can Do Right Now
While systemic changes take time, there are concrete steps that can lower your own healthcare costs. One of the most effective is pairing a high-deductible health plan with a Health Savings Account (HSA). HSA-compatible plans carry lower monthly premiums, and the HSA itself offers a rare double tax advantage: contributions are tax-deductible going in, and withdrawals for qualified medical expenses are tax-free coming out. If you’re relatively healthy and can absorb a higher deductible in a bad year, this combination can save hundreds or thousands of dollars annually compared to a traditional PPO plan. The money in your HSA rolls over year to year and can even be invested for long-term growth.
Review every medical bill before paying it. Billing errors are common in healthcare. Medicare’s own audits have found paid claims error rates above 10%, with incorrect coding accounting for about 17% of errors and insufficient documentation making up nearly 44%. Private insurance bills carry similar problems. Request an itemized bill, check for duplicate charges, verify that the services listed match what you actually received, and call your provider’s billing department to dispute anything that looks wrong. Many hospitals also offer financial assistance programs or payment plans that they won’t mention unless you ask.
Finally, use telehealth and urgent care strategically. An ER visit for a non-emergency problem can cost 5 to 10 times what the same issue would cost at an urgent care clinic or through a virtual visit. Many insurance plans now offer $0 or low-cost telehealth consultations as a standard benefit. Checking your plan’s telehealth options before heading to a clinic can save you hundreds of dollars per visit, especially for minor illnesses and routine follow-ups.