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Overcharged: Why Americans Pay Too Much For Health Care
" Overcharged is just what the doctor ordered." ―Jeffrey S. Flier, MD, former dean, Harvard Medical School Why is the American health care system so dysfunctional and expensive? Why does the EpiPen, containing $1 worth of medicine, cost $600? Why do hospitalized patients receive bills laden with inflated and surprise charges that come out of the blue from out-of-network providers, or that demand payment for services that weren't delivered? Why is more than $1 trillion―one out of every three dollars that passes through the system―lost to fraud, wasted on services that don't help patients, or misspent? What are the causes of spiraling costs, mediocre quality, and limited access? Overcharged details how the answers to these questions are connected and reveals a system that performs as if it had been designed to spend as much money as it can, and to be as confusing and unfriendly as possible, with no accountability. Overcharged then exhaustively details real reforms―showing how health care can become more efficient and pro-consumer when it is subjected to the competitive forces that apply to the rest of the economy, and will only get better and cheaper when consumers exert pressure from below.
435 pages, Paperback
Published July 3, 2018
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Displaying 1 - 19 of 19 reviews
January 4, 2019
This was the best book I read in 2018, and only costs $1.99! Which is a bargain price, even if you ultimately disagree with the book's arguments, because you'll still learn about ways to save thousands of dollars on your medical bills.
The key insight, drilled home again and again in each chapter, is that American healthcare is overpriced because government regulations and subsidies force routine healthcare spending through third parties, such as Medicare and employer-provided insurance plans, rather than the default of people paying for routine care directly, as occurs with every other kind of necessary expense. Healthcare providers have every reason to overcharge their customers under this arrangement, because customers don't have an incentive to shop for the best price, as occurs with medical procedures where they can't bill an insurer (and as occurs in Singapore).
Milton Friedman and other free-market economists have already made this point time and time again. Arnold Kling and John Goodman have also written similar books explaining how healthcare prices become disconnected from value. What this book brings to the table is a comprehensive presentation of how the third-party payment model distorts every facet of the healthcare economy, and a prescient analysis of why this ruinous arrangement is unlikely to end soon.
The key insight, drilled home again and again in each chapter, is that American healthcare is overpriced because government regulations and subsidies force routine healthcare spending through third parties, such as Medicare and employer-provided insurance plans, rather than the default of people paying for routine care directly, as occurs with every other kind of necessary expense. Healthcare providers have every reason to overcharge their customers under this arrangement, because customers don't have an incentive to shop for the best price, as occurs with medical procedures where they can't bill an insurer (and as occurs in Singapore).
Milton Friedman and other free-market economists have already made this point time and time again. Arnold Kling and John Goodman have also written similar books explaining how healthcare prices become disconnected from value. What this book brings to the table is a comprehensive presentation of how the third-party payment model distorts every facet of the healthcare economy, and a prescient analysis of why this ruinous arrangement is unlikely to end soon.
March 26, 2026
A challenge to review, for so many reasons, including knowing and respecting one of the authors. He and his coauthor are law-and-economics scholars who work mostly (but not exclusively) in the health law space. Here's the thing. Several of the chapters relate directly to issues that I have worked on, deeply, for decades, and know intimately -- and much better than they do. I know the facts, and the law, much better. And those chapters are sloppy. Methodologically they are sloppy; one cannot rely on allegations (complaints) (or one side's expert reports) as actual evidence, for instance, not as evidence of the truth of what's being asserted in them. But also, conceptually, they are sloppy -- using rhetoric and appeals to emotion to imply (or even expressly allude to) conclusions that aren't fully supported or don't in fact align with the law or the facts on the ground.
Because these guys are smart, I suspect them of sacrificing accuracy (either knowingly finessing things, or perhaps "not caring" about the details) for readability. Many of the facts and stories are more complicated and nuanced than they care to admit (or perhaps understand). Much of the law and regulation is more gray and tricky than they realize. And it frustrates me to see, because the book is actually incredibly important. (And the thing: if I can see these problems in the three or four chapters that are in my bread and butter, if these problems had me writing angrily in the margin in those chapters, should I assume similar weakness in the rest of the book?) I'm also frustrated by the tone of the book (the sarcasm and snark, the intemperate words, the accusations, the rudeness), which I find lazy as well as off-putting. All of this said: the authors actually have really good points (centrally, about the impact of relying on third party payers) and really important proposals (eliminate third party payers, give people cash to spend on health care, switch to catastrophic healthcare insurance, etc.). The book is important to read for those points, but speaking for myself I would assign something else to students (even something by them, written for academics) to understand the concepts and argument they are making.
Because these guys are smart, I suspect them of sacrificing accuracy (either knowingly finessing things, or perhaps "not caring" about the details) for readability. Many of the facts and stories are more complicated and nuanced than they care to admit (or perhaps understand). Much of the law and regulation is more gray and tricky than they realize. And it frustrates me to see, because the book is actually incredibly important. (And the thing: if I can see these problems in the three or four chapters that are in my bread and butter, if these problems had me writing angrily in the margin in those chapters, should I assume similar weakness in the rest of the book?) I'm also frustrated by the tone of the book (the sarcasm and snark, the intemperate words, the accusations, the rudeness), which I find lazy as well as off-putting. All of this said: the authors actually have really good points (centrally, about the impact of relying on third party payers) and really important proposals (eliminate third party payers, give people cash to spend on health care, switch to catastrophic healthcare insurance, etc.). The book is important to read for those points, but speaking for myself I would assign something else to students (even something by them, written for academics) to understand the concepts and argument they are making.
January 24, 2026
Easy 5/5 stars, fantastic work. It's criminal the information in this book isn't a standard part of US medical education, but also, reading this book makes it very easy to understand why it isn't. A brilliant, extremely well-researched, well-reasoned out book that makes it abundantly clear exactly why the US healthcare system functions the way it does. This book is free of the ridiculous, poorly informed, and inadequately reasoned-out claims about US healthcare costs and spending that usually flood political debates, the mainstream media, and the opinions of most laypeople. Instead, it takes a very clear look at exactly how the US healthcare system is structured, what the unavoidable incentive structures and results are that will inevitably lead from it, and ends with very reasonable suggestions for ways to improve these structures. This book should be read by every person who believes that vague buzzwords like "capitalism" or "profit-seeking CEOs" are the reason our healthcare system is as disastrous as it is (and it is disastrous), or who think that cries for "free healthcare" are a magic band-aid to fix this broken system. There are very understandable reasons why in our existing healthcare system a bottle of Coca Cola costs like $2.50 and the most rudimentary of medical care can cost thousands of dollars, and it is certainly not because the CEO of Coca Cola is any less profit-seeking than healthcare executives. Reading this book gives you a look into the wildly corrupt and perversely incentivized US healthcare system and makes it very clear how we got to the state we're in. Cheers to the authors who wrote this book, it takes an incredible amount of work to write something like this and I also doubt it earned them a lot of friends, so kudos.
May 25, 2022
Never before have I agreed so much with so many arguments simultaneously. It's no secret that the traditional American healthcare system is an inefficient, exploitative and unjust system that sustains itself only through propagating fear in the minds of the public that it pretends to serve. Everyone involved in the process including big-pharma, hospitals and societies of physicians across all 50 states actively collude with the lawmakers to undermine public welfare while at the same time line their pockets with billions of dollars (actually, the aggregate over-spend is in trillions). All this is enabled by the faulty and paternalistic Medicare/Medicaid/VHA programs, which, in the guise of universal healthcare and insurance, are just massive protection rackets coupled with the most illiberal form of social welfare that probably ever existed.
This book does two things:
1. Systematically explore the fundamental shortcomings of the current system (which are too many to even wrap your head around), and
2. Present alternatives that solves each of the issues.
All the authors proposals are backed up by studies in reputable journals, as well as the alternatives presented are actually drawn/motivated by existing real-world examples, such as the Medisave system of Singapore and the world-class low-cost surgical treatments provided by leading hospitals in Europe and Asia.
A must read for anyone who wishes to understand the complex issues around healthcare and Obamacare.
This book does two things:
1. Systematically explore the fundamental shortcomings of the current system (which are too many to even wrap your head around), and
2. Present alternatives that solves each of the issues.
All the authors proposals are backed up by studies in reputable journals, as well as the alternatives presented are actually drawn/motivated by existing real-world examples, such as the Medisave system of Singapore and the world-class low-cost surgical treatments provided by leading hospitals in Europe and Asia.
A must read for anyone who wishes to understand the complex issues around healthcare and Obamacare.
January 29, 2021
This is one of the most rewarding and illuminating books on policy I have ever read. America's health system is defined by its complexities and intricacies, and so are the reasons for why it is so costly and inefficient. The basic theme of the book is that America's healthcare woes are caused by the widespread use of insurance and third-party payers. Insurance artificially increases healthcare consumption, and disincentivizes consumers from shopping for the best prices. Why would someone shop for deals when their insurance is covering everything? Because consumers are shielded from having to pay for costs upfront, medical providers get away with an innumerable amount of questionable billing and outright fraud, which costs our nation tens of billions each year.
The book also goes after our patent system for drugs and medicine. The system is abused, which entrenches monopolistic practices, allowing sole providers of drugs to jack up prices.
It is a book rich in real-world examples of providers and drug manufacturers behaving improperly. The book will make you angry at what goes on, but its final chapters are quite positive- they put forward various solutions, including replacing patents with prizes, replacing comprehensive insurance with catastrophic insurance, increasing the amount of first-person payments out of pocket, reforming medicare, and replacing medicaid with lump sum cash payments to the indigent.
The book has a libertarian/free market bent (I must admit I am as well), but people of any political persuasion will find the book stimulating and educational as to WHY the current system is so broken.
The ONLY complaint I have of this book is that there were actually too many real-world examples provided, even after some point was explained. They appeared as filler, in my opinion. I found myself in multiple chapters skipping the examples portions because I already understood the gist.
Can't recommend the book enough!
The book also goes after our patent system for drugs and medicine. The system is abused, which entrenches monopolistic practices, allowing sole providers of drugs to jack up prices.
It is a book rich in real-world examples of providers and drug manufacturers behaving improperly. The book will make you angry at what goes on, but its final chapters are quite positive- they put forward various solutions, including replacing patents with prizes, replacing comprehensive insurance with catastrophic insurance, increasing the amount of first-person payments out of pocket, reforming medicare, and replacing medicaid with lump sum cash payments to the indigent.
The book has a libertarian/free market bent (I must admit I am as well), but people of any political persuasion will find the book stimulating and educational as to WHY the current system is so broken.
The ONLY complaint I have of this book is that there were actually too many real-world examples provided, even after some point was explained. They appeared as filler, in my opinion. I found myself in multiple chapters skipping the examples portions because I already understood the gist.
Can't recommend the book enough!
January 17, 2019
Overcharged has given me a lot to think about in terms of our healthcare system and where we are headed. We talk a lot about how people have pre-existing conditions and how most people cannot afford health care without insurance. I think this book does more than a good job at explaining how third-party payers have spiked the healthcare industry for massive gains. The reason for the outrageous prices in healthcare is simple: Healthcare is expensive because it’s insured. If we used insurance on our cars as we do in healthcare, car insurance would be fought like how healthcare is today. There are a lot of scandals that occur under third-party payers, including Medicare and Medicaid that the government estimates $100 billion in fraudulent charges every year. This is their low-ball estimate by the way. Not only does the book gives a lot of examples of how the taxpayer gets taken for a ride, but the second part also gives solutions to those problems. From the pharmaceutical industry to how hospitals can create stable revenues. But one this is for sure, we need to start paying out of pocket for our health expenses and stop relying on health insurance so much. I will leave you with one fact from the book. In 1960, consumers paid $1.80 out of pocket for every dollar spent on services by a third party payer. In 2010, consumers pay less than $0.20 for every dollar spent by third-party payers.
May 5, 2019
This is the most important book I read in 2019. It's thoroughly researched, with lots of eye-opening anecdotes to go along with the numbers. The book gets the message across that there are people and companies in every part of the healthcare sector who are taking in way more money than the value they provide to patients. Doctors, hospitals, pharmaceutical companies, insurers, and everything in between have bad apples that take advantage of customers. I agree with the authors that consumers need to have more skin in the game in order to get markets functioning better. I disagree with them on the specifics of getting that accomplished, but that doesn't make the book any less important. This is essential reading for anyone who wants to improve value and control costs in the U.S. healthcare system.
February 6, 2019
We've all heard the debate around health care. "Medicare for All!" "Repeal Obamacare" Regardless of where you sit on the spectrum of the debate, I highly recommend this book. The authors take a pragmatic, fact-based, analytical approach to examining the issues surrounding the current American medical system, why it's dysfunctional, and what might ideally replace it while preserving the values we as a society espouse. It's crammed full of data and statistics, which makes for a bit of a slog at times, but this only serves to make the authors' conclusions that much more powerful.
September 3, 2018
I read this book because I'm five months from Social Security and Medicare. It's astounding how many sectors of our economy are driven by corruption and inefficiency by government interference. My former industry of real estate and finance is another good example. The authors hit the bullseye that consumers drive the free market to efficiency when they have to personally write the check instead of relying on third parties for payments of goods and services.
October 27, 2018
America’s health care disaster
This book does a great job pointing out the abuses, overcharges and policy disasters that have put us in the mess we’re in. Costs will continue to increase as long as congress is dependent on political contributions from the health providers and insurers. Fraud and inefficiencies are everywhere. Moving to third party payers or single payers will make health care unaffordable without improving health care outcomes. Get the government out of it.
This book does a great job pointing out the abuses, overcharges and policy disasters that have put us in the mess we’re in. Costs will continue to increase as long as congress is dependent on political contributions from the health providers and insurers. Fraud and inefficiencies are everywhere. Moving to third party payers or single payers will make health care unaffordable without improving health care outcomes. Get the government out of it.
January 11, 2025
Yes, this book was written by Cato bros. While I was reading one of the many introductions/prologues/forwards (so many--it was like watching Return of the King in reverse) outlining their thesis, that the US healthcare system exists to funnel money to providers (doctors and hospitals, in addition to pharmaceutical companies), I thought, "This is a little much, even for my inner libertarian." But they convinced me. Now I just have to read an expose on every other country's healthcare system.
May 30, 2019
I don't agree with everything in this book, but it provides an additional perspective on a complex issue. The authors perspectives were well thought out and supported. Fewer stars because at times the examples felt redundant, the book dragged and became overly technical filled with acronyms and details that could be hard to keep straight.
November 15, 2021
Even if you don't agree with the proposed solutions (I mostly do) you can't deny that the authors present an exceptional analysis of what's wrong with the current healthcare system. At least the first part is a must-read for anyone mildly interested in the topic.
September 5, 2018
Very good and comprehensive review of the American healthcare system and its problems. Followed by suggestions for fixing most of the problems.
October 2, 2019
Very informative. Easy to read. Well-researched and reasoned. A little heavy with the pithy metaphors. Recommended if this subject interests you.
May 16, 2021
[Imported automatically from my blog. Some formatting there may not have translated here.]
This book is published by Cato, and written by two lawprofs: David Hyman (from Georgetown) and Charles Silver (University of Texas). The Kindle version is a mere $1.99 at Amazon. Incredible deal. Downside: it's very, very long: print version is 592 pages. Although the last 20% or so of the book is devoted to footnotes.
My immediate take: It's a good remedy for people who are advocating "Medicare for All". After reading this, you'll be saying (if you weren't already): Are those people out of their freaking minds? Because Medicare is seriously broken, rife with waste, fraud, and abuse. Maybe we should fix it first, before extending its breakage to the entire populace?
Yes, Medicare is "popular". Which is why Democrats find "Medicare for All" to be a winning slogan. But the authors show why it's popular: it doesn't ask too many inconvenient questions before shelling out huge sums of cash. Its income is silently deducted away in people's paystubs. And politicians love it because they get to run it and take credit for keeping the goodies flowing. Of course, as New Hampshire's own Drew Cline points out: it's due to run out of money in a few years, and politicians are diligently ignoring that problem. (One guy who wasn't: Paul Ryan. For his troubles, now an ex-Congressman.)
But it's not just Medicare, pretty much the entire market for health care is dysfunctional. The authors recite one horror story after another, showing how terrible things are. Most of the problem is due to the nature of third-party payments, where consumers are insulated from normal market price signals. The system can corrupt even honest people, who can hardly be blamed for responding to the incentives it presents. (People do so with varying degrees of eagerness, of course.)
The authors also have a bone to pick with "Big Pharma", which uses all the tricks in the patent book to protect its fat profits. The stories here might have you nodding in agreement with Bernie Sanders. The authors have some ideas about reforming the patent system for life-saving drugs, which may work. (Unfortunately, a lot of pols seem to be in Big Pharma's pocket, and those that aren't seem to be more interested in using the industry as a whipping boy for their own political gain, not
The authors are (surprisingly) optimistic about the future; they have visions that an increasingly expensive and inefficient market will give rise to more and more "retail" medicine, more medical tourism, and cheap insurance against "catastrophic" medical costs.
That would be nice, but I'm less optimistic when nearly all the politicians and all the mainstream media have bought into the narrative that's brought us to the current dreadfulness.
Anyway: an interesting (albeit anger-provoking) read, and (as said) a very good deal via Kindle.
January 14, 2019
I must confess. I’m usually not an eager reader of Cato Institute publications. Many of them come off as overly-wonkish, Chamber of Commerce-approved reports. But I had heard good things about Charles Silver’s and David A. Hyman’s new book, Overcharged: Why Americans Pay Too Much for Health Care, and decided to give it a good cover-to-cover read. I’m glad I did.
It is easy to get angry reading this book. I’m sure my blood pressure increased a few points as they went through their litany of examples of fraud, waste and abuse, across both public (Medicare, Medicaid ) and private insurance systems. But it is an argument that must be made and that everyone should hear: Our system of 3rd party payers desensitizes healthcare consumers to costs and encourages over-consumption. This is encouraged by political control over the public programs, which is captured by the healthcare industry, to maximize the amount of taxpayers dollars transferred to this sector. The end result is the overly-costly system we have today. It is working by design.
Their proposed solution? Read more of my review here: https://www.whynotlibertarianism.com/...
It is easy to get angry reading this book. I’m sure my blood pressure increased a few points as they went through their litany of examples of fraud, waste and abuse, across both public (Medicare, Medicaid ) and private insurance systems. But it is an argument that must be made and that everyone should hear: Our system of 3rd party payers desensitizes healthcare consumers to costs and encourages over-consumption. This is encouraged by political control over the public programs, which is captured by the healthcare industry, to maximize the amount of taxpayers dollars transferred to this sector. The end result is the overly-costly system we have today. It is working by design.
Their proposed solution? Read more of my review here: https://www.whynotlibertarianism.com/...
January 17, 2020
This is the best thing I've read in regards to the economics of American healthcare. It is extremely detailed and reviews topics such as universal healthcare, big pharma, Medicare and Medicaid, corruption, and just about everything else. It offers some very good solutions to these complex problems. I wish that somehow our entire population could read and understand this book. It is detailed and took a while to get through but it was a very valuable read.
May 4, 2019
Excellent analysis of misguided attempts to lower costs and improve access by making health care less competitive rather than more.
Displaying 1 - 19 of 19 reviews