Healthcare Spending: What You Pay, Why It’s High, and How to Save

When you hear healthcare spending, the total amount of money spent on medical services, drugs, and insurance in a given period. Also known as medical expenditure, it’s not just what hospitals charge—it’s what pharmacies, insurers, and Pharmacy Benefit Managers (PBMs) quietly add on top. In the U.S., people pay more for the same drugs than almost any other country, not because they’re better, but because the system is built to hide costs.

Behind the scenes, PBMs, companies that manage drug benefits for insurers and employers. Also known as pharmacy benefit managers, they negotiate prices with drugmakers and pharmacies—but they don’t always pass savings to you. Instead, they use spread pricing, where they charge your insurer more than they pay the pharmacy, and you end up paying the difference. That’s why sometimes your cash price is lower than your insurance price. And generic drugs, cheaper versions of brand-name medications that are just as effective. Also known as non-brand drugs, they’re supposed to cut costs—but even these aren’t always cheaper if the PBM controls the supply chain. Some generics cost more because there’s only one manufacturer, or because the PBM locks in deals that block competition.

Then there’s insurance formularies, lists of drugs your plan covers and at what cost. Also known as drug lists, they’re not based on what’s best for you—they’re based on what gets the PBM the biggest rebate. A drug might be on your plan because the maker paid a kickback, not because it works better. That’s why you might be stuck with a brand-name drug even when a generic exists. And if you’re on a narrow therapeutic index drug like warfarin or levothyroxine, switching generics without knowing the risks can be dangerous.

Healthcare spending isn’t just about how much you pay at the pharmacy. It’s about hidden fees, gag clauses that stop pharmacists from telling you about cheaper options, and labeling rules that delay safety updates. It’s about why your insulin costs $300 while the same drug costs $20 in Canada. It’s about how a false penicillin allergy label can lead to more expensive, less effective antibiotics—and higher bills.

This collection of posts cuts through the noise. You’ll find real breakdowns of how drug prices are set, how to spot when you’re being overcharged, and what steps you can take right now to save money. Whether you’re on a chronic medication, managing a new diagnosis, or just trying to understand why your co-pay jumped, you’ll find answers that actually help.