We spend a lot of money on health care in the United States. About 15% of GDP, in fact. Quite a few countries get universal health care with much less than that. And as we all know, the US doesn't have universal government coverage.
But the overall figure hides another very important figure. The US government already spends about 6.6% of GDP on health care. The interesting thing about that number is that it is about what the governments of most other Western countries spend on health care for their much more universal systems. The OECD average is only 6% of GDP. The UK spends 6.4% for their universal system. Canada spends 6.7% for their universal system.
Essentially the US government already spends enough money to have a universal system, but only actually covers about 27% of the population.
And this isn't a story of the triumph of the free market in the US. The private sector spends 8.1% of GDP and covers only 69% of the population. 8.1% of GDP is enough to cover the universal public spending of every country other than Germany. And with Medicare and Medicaid taking many of the oldest and sickest patients, the private systems aren't even necessarily covering most of the expensive patients.
So what is going on here? Both the government and the private sector already spend more than enough money on their own to each cover the expenditures of a universal system. I honestly don't know. But I find it surprising that the fact that our government already spends enough money to cover the universal systems of almost any other Western nation doesn't get discussed much. It has enormous policy repercussions for both sides of the debate (universal health care advocates might want to examine why the government doesn't already provide universal health care considering the money it spends, and private health care advocates should do the same).
My guess is that 3 things contribute to the discrepancy: doctor salaries (much higher in the US), futilely spending too much on that last month before death (anecdoteally much higher in the US, I'd love to see useful comparison statistics), and overuse of the system by the middle class which has private insurance, for trivial matters because they don't see the costs other than a copayment. But this is just a guess. I don't really know, because for whatever reason the discussion of "why don't we have universal health care, our government and private systems EACH spend enough for it compared to other countries" hasn't been raised.
Just to head it off, here are some things that don't explain it.
Drug costs. They are higher in the US, but the main reason people complain about them is because it is the one area where the average person is exposed to the true cost of health care. In fact they only represent about 10% of overall health care costs.
Medicare has the oldest and sickest people. This is probably true, but doesn't change the fact that the governments of other countries cover their oldest and sickest 27% plus every other person in their country for about the same cost as the US government covers only 27% of the population.
Administrative costs. Same cite as Drug Costs suggests 7% administrative costs (and depending on what other professional services means that may be 17%). In either case you have to realize that other countries have administrative costs (so this number isn't going to zero) and that even if it were all waste, it doesn't come close to covering the gap. Private plus public spending in the US is more than double that of other countries. Admin costs would have to be almost 60% of total spending to make that up. Whatever the exact number is, it isn't anywhere near that.