Final answer:
The lack of success in controlling healthcare costs in the U.S. stems from cost shifting by providers, the complexities of fee-for-service and HMO payment structures, adverse selection in insurance markets, and a system that reduces price sensitivity among consumers leading to inefficiencies.
Step-by-step explanation:
The main reason for the lack of success of health care cost control efforts in the U.S. can be attributed to a complex set of factors, including cost shifting by providers, the growth of technology, and how healthcare systems are financed. In a fee-for-service system, providers are reimbursed based on the services provided, potentially leading to higher costs. In contrast, Health Maintenance Organizations (HMOs) pay providers a set fee per patient, regardless of how many services are used, which can lead to resource allocation issues. Furthermore, adverse selection can inflate costs when high-risk individuals utilize more insurance resources than low-risk individuals, who may forego insurance due to its costliness. Additionally, the tendency of medical providers to raise prices in response to being primarily paid by insurance companies and the government contributes significantly to soaring costs. The lack of direct payment by consumers, unlike in a free market, leads to diminished price sensitivity and contributes to an inefficient system where emergency rooms can be overused for primary care, and fraud becomes more viable.