Last Thursday, around 10:20 PM, I was doing what I always do when I should be sleeping — browsing Hacker News — and I stumbled on a GitHub repository that genuinely made me angry. Not annoyed. Not mildly frustrated. Actually angry.
The repo is called The American Healthcare Conundrum, and it does something deceptively simple: it takes publicly available federal healthcare data — CMS records, OECD comparisons, hospital cost reports — and quantifies exactly how much money the US healthcare system wastes on fixable problems. The running total after just three issues of analysis? $98.6 billion per year.
And they have barely scratched the surface.
Disclaimer: This article is for informational and educational purposes only. It is not medical advice or a substitute for professional healthcare guidance. Consult your physician or a qualified health professional for medical decisions. Data sources include CMS (Centers for Medicare & Medicaid Services), the OECD, and the Peterson-KFF Health System Tracker.
The Numbers That Should Make You Furious
The project has published three issues so far. Each one identifies a single fixable problem and quantifies it with primary federal data. Here is the breakdown:
Issue 1: OTC Drug Overspending — $600 Million Per Year
Medicare pays prescription-level prices for drugs you can literally buy off the shelf at CVS. We are talking about things like omeprazole (Prilosec), cetirizine (Zyrtec), and loratadine (Claritin). The same pill that costs $8 at Walmart gets billed at $40-80 when it goes through the Medicare Part D pipeline.
My colleague Dr. Priya — she is a family medicine physician who moonlights as my unofficial healthcare explainer — called this "the most predictable waste in the entire system." We were grabbing coffee (her usual $5.40 oat milk latte, mine a $6.20 drip that I keep telling myself is worth it), and she walked me through how it works.
"A patient gets prescribed Prilosec. It goes through the Part D formulary, through the PBM, through the pharmacy benefit layer, and by the time the claim processes, Medicare has paid ten times what the patient could have paid out-of-pocket at any drugstore in America," she said. "The fix is embarrassingly simple: just exclude OTC-available drugs from Part D coverage and give patients the cash equivalent. Nobody loses except the middlemen."
Issue 2: International Drug Price Gaps — $25 Billion Per Year
This one is the gut punch. The US pays 7 to 581 times more than peer nations for the same brand-name drugs. Not similar drugs. The exact same pill, made in the exact same factory, shipped to a different country.
The project analyzed CMS Part D data against NHS tariffs, German reference prices, and RAND Corporation figures. A drug that costs $300/month in the US might cost $40 in France and $55 in Japan. The analysis suggests international reference pricing — benchmarking Medicare negotiations against what Germany, France, Japan, the UK, and Australia pay — would save approximately $25 billion annually.
To put that in perspective: $25 billion is enough to eliminate medical debt for roughly 3.5 million Americans. Every single year.
Issue 3: The 254% Hospital Markup — $73 Billion Per Year
This is the big one. According to RAND Corporation's Round 5.1 Hospital Pricing Study, commercial insurers pay an average of 254% of Medicare rates for identical hospital procedures. A hip replacement that Medicare pays $11,000 for gets billed at $29,000 to private insurance.
The project analyzed 3,193 hospitals from raw CMS HCRIS FY2023 federal cost reports and found that the median markup in nonprofit hospitals — nonprofit, mind you — is 3.96 times actual operating costs. Thirty-seven percent of all hospitals charge 3x or more above what it actually costs them to provide care.
And here is the kicker: the fix already exists. Montana Medicaid implemented reference-based hospital pricing years ago, capping payments at 200% of Medicare rates. Thousands of self-insured employers use the same mechanism. If applied nationally, the savings would be approximately $73 billion per year.
Why This Matters for Your Personal Health Budget
I know what you are thinking. "Cool, systemic waste, but what can I actually do about it?" More than you think.
1. Always Ask for the Cash Price Before Using Insurance
This sounds counterintuitive, but for many prescriptions and some procedures, the cash price is lower than your insurance copay. My friend Marcus learned this the hard way when he was paying a $45 copay for a generic medication that Cost Plus Drugs (Mark Cuban's pharmacy) sells for $4.80. That is not a typo. Forty-five dollars versus four dollars and eighty cents.
Tools like GoodRx and Cost Plus Drugs let you compare prices instantly. Use them before every prescription fill — especially for supplements and OTC medications where the markup is absurd, as we documented in our review of GLP-1 supplement claims. I am serious. Every single time.
2. Request an Itemized Bill for Every Hospital Visit
When you get a hospital bill, it usually comes as a lump sum. Request the itemized version. You will be shocked. $47 for a single Tylenol tablet. $320 for a "mucus recovery system" (that is a box of tissues). $83 for a "dermal adhesive application" (a Band-Aid).
Hospitals count on the fact that most people never look at the details. A 2024 study by the Health Affairs journal found that patients who requested itemized bills and disputed charges reduced their final payment by an average of 17-24%. That is not negotiating skill. That is just catching errors and overcharges.
3. Use Hospital Price Transparency Data
Since January 2021, hospitals have been required by federal law to publish their prices online. Most bury these files in machine-readable formats nobody can find. But tools like Turquoise Health and Dollar For make the data searchable. Before any planned procedure, compare prices across hospitals in your area. The price difference for the same surgery at hospitals 10 miles apart can be 300-400%.
I checked this myself last month when I needed a routine imaging scan. The hospital my doctor referred me to quoted $2,800. A freestanding imaging center 12 minutes down the road charged $340 for the identical scan using the same equipment manufacturer. Same images, same quality, $2,460 difference. I felt like I was being pranked.
4. Challenge Every Surprise Bill
The No Surprises Act (effective January 2022) protects you from most out-of-network surprise bills for emergency services and certain non-emergency situations. But enforcement requires you to actually dispute the charge. The CMS No Surprises Help Desk (1-800-985-3059) can walk you through the process. According to CMS data, 72% of consumers who formally disputed surprise bills through the federal process got a reduction.
5. Check If You Qualify for Financial Assistance (Even With Insurance)
Most nonprofit hospitals are legally required to offer financial assistance programs as a condition of their tax-exempt status. These programs are not just for uninsured patients. Many cover people with insurance whose bills exceed a certain percentage of household income. Dollar For is a nonprofit that helps patients apply for hospital financial assistance — they have helped cancel over $30 million in medical debt so far.
The System Is Not Broken — It Is Working Exactly as Designed
Here is the uncomfortable truth that the American Healthcare Conundrum project makes painfully clear: the US does not accidentally spend $14,570 per person on healthcare while Japan spends $5,790 and achieves better outcomes. The system is optimized for revenue extraction, not health outcomes.
That $3 trillion annual gap between what the US spends and what peer nations spend is not "complexity." It is not "innovation." It is margin. And it comes from your paycheck, your premiums, your deductibles, and your medical bills.
The project has identified $98.6 billion in savings from just three issues. That is 3.3% of the $3 trillion gap. They have barely started. The problems are well-documented, the data is public, and in many cases the fixes are already being used somewhere in the system.
The question is not whether the waste exists. It is whether anyone with power cares enough to fix it.
In the meantime, arm yourself with the tools above — and be cautious about relying on AI chatbots for medical guidance, as our analysis of ChatGPT missing half of medical emergencies made painfully clear. The system will not protect you. You have to protect yourself.
Disclaimer: This article is for educational purposes only and does not constitute medical or financial advice. Individual healthcare decisions should be made in consultation with qualified healthcare providers. Sources: CMS, RAND Corporation, Peterson-KFF Health System Tracker, OECD Health Data, Health Affairs, The American Healthcare Conundrum (GitHub).
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