The shocking world of US health costs

Summary

More or Less – The Shocking World of US Health Costs

Podcast: More or Less (BBC Radio 4)
Host: Tim Harford
Guest: Elizabeth Rosenthal, Editor-in-Chief at KFF Health News
Date: December 20, 2025

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Episode Overview

This episode dives into the eye-watering and often bewildering costs of healthcare in the United States. Prompted by a listener question about a claim that a single pill could cost 250 times more in a hospital than at a pharmacy, host Tim Harford and healthcare journalist Elizabeth Rosenthal unpack why US hospital expenses are so extraordinarily high, how the system got this way, and the real-life impact on Americans.

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Key Discussion Points & Insights

1. The Viral Pill Story (01:36)

• Listener Bettany hears a claim that one pill can cost $3 at a pharmacy, but $750 in a US hospital—a markup of over 250 times.
• Tim Harford introduces the episode's purpose: to check the facts and explore hospital billing practices.

2. How Hospital Charges Became So High (03:16)

• Elizabeth Rosenthal: Hospitals began maximizing billing after bringing in business consultants in the early 2000s.
  • “The consultants basically said, why are you just giving away that Tylenol?...You could be billing that separately and billing in 15 minute intervals.” (03:21)
• Hospitals now bill for every item and minute of care, leading to extremely detailed and high itemized bills.

3. Medication Markups and the 340B Program (04:24)

• Many US hospitals are non-profit, avoiding taxes in exchange for community benefit, but often fall short of this expectation.
• The 340B Hospital Markup Program (1992) lets certain hospitals buy drugs at deep discounts (about 50% off retail) and resell at huge markup.
  • “They can buy medications at incredibly reduced rates and then mark up the prices to make a profit.” (04:35)

4. Political and Economic Power of Hospitals (05:18)

• Hospitals are among the largest political donors and employers in many states.
  • “Politicians are afraid to go after them. University of Pittsburgh Medical center is the second largest employer in the state of Pennsylvania.” (05:25)
• Even ‘non-profit’ hospitals behave aggressively to maintain income.

5. Real-Life Examples of Wild Hospital Charges (05:58)

• The show highlights real bills flagged by the KFF/NPR "Bill of the Month" project:
  • Woman charged $4,000 per screw for foot surgery.
    • “She was like, what are they made of, like moon rock or something?” (06:00)
  • $99,000 for removal of an ectopic pregnancy—billed as two surgeries.
    • “This is an outpatient procedure, by the way.” (06:20)
• Charges are often disaggregated, so nothing is included as a "package": each component is separate and expensive.

6. Insurance Complexities and Out-of-Pocket Costs (06:42)

• Americans must have insurance due to sky-high baseline costs.
• Insurance only pays for services within agreed networks; otherwise, patients may be denied coverage.
  • Elizabeth: “I'm always on the lookout, okay, I need this procedure. If it's done in a hospital, I'm going to have a huge facility fee...” (07:06)

7. The Role of “Pre-existing Conditions” and Obamacare (07:30)

• Until 2014, insurance could deny coverage due to “pre-existing conditions” (diabetes, asthma, pregnancy, mental health).
  • “Maybe you take a pill for depression so you have pre existing conditions, we're not going to cover you. And Obamacare forbid that from happening.” (07:43)

8. Rising Deductibles, Co-Insurance, and Medical Debt (08:03)

• Deductibles have skyrocketed (“at first were like $500, now they can be $7,000” (08:03)). Patients pay all costs up to this limit before insurance kicks in.
• Insurance often only covers a percentage, with patients responsible for “co-insurance”—often 10–20%.
  • “Finger injections…cost $25,000 each…coinsurance on that is $4,000. Even if you have insurance, the out-of-pocket costs can be overwhelming.” (08:27)
• 8% of Americans are fully uninsured.
• Investigation: 100 million Americans (almost 1 in 3) have medical debt; nearly 20% believe they’ll never pay it off. (09:04)

9. Policy Subsidies and Looming Risks (09:21)

• ACA subsidies (from Biden administration) have helped tens of millions afford insurance.
• These subsidies are about to expire (in January 2026), threatening to double or triple premiums for vulnerable Americans.
  • “Many people will say, I can't afford insurance and go without. And that's a really risky proposition when a trip to the emergency room in the US routinely costs $10,000, and that's with very little done.” (09:44)

10. Yes, the Shocking Pill Story is True (10:06)

• It’s entirely possible for a $3 pharmacy pill to be billed at $750 or more in hospital, with significant markups common across US healthcare.

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Notable Quotes & Memorable Moments

• Elizabeth Rosenthal on itemized billing:
  “Now you look at an American hospital bill and it's pages and pages long because every IV bag, every pill, every blood draw, everything is charged separately.” (03:21)

• On hospital-purchased drugs:
  “They can buy medications at incredibly reduced rates and then mark up the prices to make a profit. The idea was that they'd then channel the money saved by back into the community.” (04:35)

• On political power:
  “They are huge political donors. Politicians are afraid to go after them.” (05:25)

• On real-life medical bills:
  “A woman needed screws put into her foot...each one was billed at $4,000. And she was like, what are they made of, like moon rock or something?” (05:58)

• On deductibles:
  “Those deductibles…which at first were like $500, now they can be $7,000. So even if you're insured, you're vulnerable for a lot of money.” (08:03)

• On the scale of medical debt:
  “100 million Americans, that's almost a third of the population, have medical debt and nearly 20% of them do not expect to be able to pay it off in their lifetime.” (09:04)

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Key Timestamps

• 01:36 – Introduction: $3 pill vs $750 pill claim
• 03:09–03:21 – Elizabeth Rosenthal’s background and how itemized billing evolved
• 04:24–04:35 – 340B Hospital Markup Program explained
• 05:41 – KFF & NPR’s “Bill of the Month” shocking case studies
• 06:42 – Insurance networks and barriers to access
• 07:30 – Pre-Obamacare insurance discrimination
• 08:03 – Deductibles and coinsurance pain for insured patients
• 09:04 – Scope of national medical debt
• 09:21–09:44 – ACA subsidy risks and future premium hikes
• 10:06 – Tim’s confirmation: shocking medical bills are unfortunately real

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Final Takeaway

The US healthcare system’s pricing is wild, routinely turning simple treatments into financial cataclysms. Both the causes—complex billing, profit-seeking by non-profits, political protection, and insurance patchworks—and the downstream effects—staggering debt, limited access, and consumer confusion—are made painfully clear. The claim of a $3 pharmacy pill becoming a $750 hospital charge isn’t just possible; it’s an everyday part of US healthcare’s “bonkers” reality.

Transcript

[A]

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[B]

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[A]

Hello and thanks for downloading the More or Less podcast. We're the program that looks at the numbers in the news, in life and in the itemized bills of U.S. hospitals. I'm Tim Harford, loyal listener. Bettany wrote into more or less questioning this absurd sounding claim that they heard on our fellow BBC programme Inside Science. Dr. Daniel Levitin, a neuroscientist, was discussing his research into how music can act as a form of medical therapy, negating the need for expensive drugs. Here in the US that volume might be $3. In a US hospital, that same volume is 750. Bettany was shocked at the idea that one pill can cost 250 times more in a hospital setting than in a pharmacy. If true, that is indeed shocking. But is it true? Let us dive into the frankly bonkers world of US hospital bills. Buckle up, it's wild.

[C]

So I knew something really bad was happening in our health system.

[A]

That's Elizabeth Rosenthal, a healthcare journalist who reported for the New York Times for 22 years before becoming editor in chief at KFF Health News. KFF, by the way, is a non profit foundation working on healthcare policy. She also wrote the book An American how healthcare became big business and how you can take it back. Oh, and casually she has A medical degree from Harvard University.

[C]

Oh, I forgot. Yes. And I worked in an emergency room and then converted to journalism to tackle health policy.

[A]

First things first. Hospitals do charge more for medicines than pharmacies.

[C]

The price is whatever the market there. What happened in the early 2000s was hospitals were running on pretty thin margins and they brought in business consultants. The consultants basically said, why are you just giving away that Tylenol? Why are you giving away that time in the recovery room? You could be billing that separately and billing in 15 minute intervals. So now you look at an American hospital bill and it's pages and pages long because every IV bag, every pill, every blood draw, everything is charged separately.

[A]

So that Valium pill wouldn't just be charged as a pill. The pill itself would likely be six times the cost of the pharmacy version. But then added onto that, you'd be charged for the paperwork that comes with prescribing the Valium for the little pot the Valium comes in. The person giving you the Valium, the sky is the limit. But why do hospitals jack up the price so much?

[C]

Most of our hospital systems are not for profit and they don't pay taxes because in theory, they're supposed to do charity care and community benefit.

[A]

In 1992, the 340B Hospital Markup Program was implemented. This was a government program that allowed 340B hospitals, which include non profit hospitals, to buy medications from manufacturers at a so called ceiling price, which is generally about 50% below the regular retail price. These hospitals can buy medications at incredibly reduced rates and then mark up the prices to make a profit. The idea was that they'd then channel the money saved by back into the community.

[C]

There's a lot of discussion about do they give back to the community what they should for their tax breaks? And the answer is almost always no.

[A]

One of the issues is that politicians are often loath to challenge them. As health is big business in the.

[C]

US they are huge political donors. Politicians are afraid to go after them. University of Pittsburgh Medical center is the second largest employer in the state of Pennsylvan. So it's very hard to tackle them.

[A]

Elizabeth and the KFF help tackle hospital costs by helping people to break down and make sense of hospital bills so they can challenge them. They work with NPR to air some of these bills on a program called Bill of the Month. The charges are shocking.

[C]

A woman needed screws put into her foot for a broken foot, and each one was billed at $4,000. And she was like, what are they made of, like moon rock or something? You know, they were just little screws. A room in a hospital, maybe $2,000 a night. I have someone who had a $99,000 bill for the removal of an ectopic pregnancy, but they charged for two surgeries because they had scraped off a little bit of endometrial tissue. Everything's disaggregated. You know, it doesn't include the recovery room, it doesn't include the IV poles, and this is an outpatient procedure, by the way. $99,000.

[A]

Yikes. Unsurprisingly, people in the US need medical insurance to be able to afford these extortionate costs. And this is where it gets even crazier. Each insurer has a network of doctors, hospitals, labs, pharmaceutical brands it has agreements with. If you don't use one of the medical institutions they have an agreement with, they won't cover the cost.

[C]

It's scary. I'm always on the lookout, okay, I need this procedure. If it's done in a hospital, I'm going to have a huge facility fee. So where else can I have it done with a low facility fee? My doctor draws labs, okay, where's he going to send that blood to? Because it better be an in network lab, otherwise my insurer won't cover it.

[A]

Successive governments have attempted to control some of these costs. For example, until 2014, insurers insurance could refuse to cover people with pre existing health conditions such as diabetes, asthma, even pregnancy.

[C]

And maybe you take a pill for depression so you have pre existing conditions, we're not going to cover you. And Obamacare forbid that from happening.

[A]

Insurers will only help cover costs after a certain threshold has been met by the claimant. So you pay a certain amount out of pocket before the insurance company starts to pay.

[C]

And those deductibles, you know, which at first were like $500, now they can be $7,000. So even if you're insured, you're vulnerable for a lot of money.

[A]

Insurance also doesn't cover the whole cost of procedures and pharmaceuticals. Insurance companies charge something called co insurance. This means that the claimant is liable for the cost of a percentage of.

[C]

The bill, which can be 10 or 20%. I have someone who I am reporting on who had just little finger injections that cost $25,000 each. And so the coinsurance on that is $4,000. Even if you have insurance, the out of pocket costs can be overwhelming for most Americans.

[A]

If you don't have insurance, you'll be liable for the whole cost. About 8% of the US population is uninsured. And often those who do have insurance can't afford to meet their coinsurance costs.

[C]

We did an investigation. 100 million Americans, that's almost a third of the population, have medical debt and nearly 20% of them do not expect to be able to pay it off in their lifetime.

[A]

It's very likely that this number will grow.

[C]

Right now we're having a debate here about extending some subsidies that that were passed during the Biden administration, which basically said if you are low income, you can have your insurance premiums subsidized, partly paid by the government. As a result of those, tens of millions of people got insurance who wouldn't have otherwise. Those subsidies are set to expire in 15 days. If the subsidies go away, many of the premiums will double or triple and many people will say, I can't afford assurance and go without. And that's a really risky proposition when a trip to the emergency room in the US routinely costs $10,000, and that's with very little done.

[A]

So, yes, it is perfectly possible that being administered a pill that should cost $3 could cost you $750 and much worse besides. Thanks to Elizabeth Rosenthal. And that's all we have time for this week. But if you see any stats you want us to take a dive into, please let us know at More or [e-mail] we'll be back next week. And until then, goodbye.

[B]

I'm Martha Stewart and I believe the best gifts are not only beautiful, but useful every single day. And Lenox has brought timeless beauty and lasting quality to our tables and for generations. And their Lenox Spice Village is the perfect holiday gift for someone you love or for yourself. Spice Village transforms everyday spices into inspired memories filled with warmth and joy all year long. Give a gift that lasts beyond the holidays. Discover the [e-mail] SpiceVillage the holidays are about giving something truly special. I'm Martha Stewart and I believe the best gifts aren't just beautiful, they're useful every single day. Lennox has brought timeless beauty and lasting quality to our tables for generations. And their Lenox Spice Village is the perfect holiday gift for someone you love or for yourself. It's more than a spice rack. It's a charming collection of hand painted houses that turn ordinary spices into extraordinary experiences. Imagine cinnamon from a tiny Victorian cottage or oregano from a pastel townhouse. Suddenly, a simple meal becomes a moment to savor. Because spices can be more than ingredients. They can inspire memories, warmth and joy all year long. Give a gift that lasts beyond the holidays. Discover the [e-mail] SpiceVillage.