South Dakota
Why South Dakota health care is the nation's second most expensive • South Dakota Searchlight
Several months ago, Forbes, a respected business and economics publication, released an analysis of the “The Most (And Least) Expensive States for Healthcare 2024.” A striking — and concerning — finding was that health care expenses in South Dakota were the second highest in the nation.
The multiplicity of payers and the differing demographics of populations in diverse geographic areas make measuring and comparing total health care costs across different regions a highly complex undertaking. Nonetheless, the findings in the Forbes article have been supported by other research.
An extensive and very interesting paper was published several years ago by the Health Care Pricing Project. This analysis looked at both Medicare costs and private insurance expenditures in 306 health care regions across the U.S. In that study, private insurance expenditures in the Sioux Falls region were the 14th highest in the nation but Medicare expenditures were near the bottom (275th out of 306). The huge difference can be explained by the fact that Medicare prices are set by the Medicare program, whereas each private payer has to negotiate prices with the individual providers.
In eastern South Dakota, there is intense competition between two large health care systems. One could reasonably expect that costs would be lower. The results show that just the opposite is true.
How can this be? The reality is that the economics of health care do not follow the principles that govern prices in standard consumer markets.
For a conventional consumer market to function efficiently, multiple suppliers need to compete based on price and the quality of products available. Consumers need to have full understanding of both product quality as well as the price charged. They need to be free to switch suppliers if they find a “better deal.” They should have the freedom to “shop around.”
So how does all this apply to health care?
First, and probably most basic, health care providers rarely compete based on price. In fact, unless patients make an effort to ask, the price of a service may well not be known until the bill arrives. Since so much of health care is paid for by third-party payers, patients often have little incentive to ask. Additionally, there is little motivation to “shop” for the best price even if that is an option available to them, which it may not be.
Furthermore, if patients do have prices to compare from competing providers, they sometimes have skepticism about low-priced services. They may be concerned that providers have “cut corners” or that the service is less trustworthy. This follows directly from the fact that, unlike most consumer goods, patients usually do not have access to objective information about the quality of the actual service being considered. They usually rely on broad provider reputations or word-of-mouth evaluations. Such sources can provide helpful perspectives but are often lacking in specifics about particular procedures, individual providers, etc.
Treating health care as a commodity has not driven costs lower
Shopping around to get the best deal makes good sense if one is buying groceries or gasoline, but it presents major problems in health care. Limitations imposed by insurance networks are real. More basically, moving from one provider to another hinders continuity of care and raises the risk of important past history being overlooked or serious risks going unnoticed. Additionally, multiple payers with multiple sets of reimbursement rules have led to administrative complexity and enormous administrative costs.
From the provider perspective, competition all too often leads to duplication of facilities and services. Rather than refer patients/customers to a competitor, each one sets up their own service. This can be a logical action from a business perspective, but in highly technical services such as organ transplantation, small volumes raise the risk of above average cost and poorer outcomes. Competition, instead of promoting lower cost and better service, actually does the opposite.
Paying for health care services is an exceedingly complex undertaking. In the U.S., health care expenditures are the highest in the world, even though we have significant portions of our population who are not getting care. Commitment to conventional market principles has served us well in much of our economy. It is clear, however, that it is not serving us well in the health care.
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(SOUTH DAKOTA SEARCHLIGHT) – Democrats are running for 46 of South Dakota’s 105 legislative seats — leaving 56% of seats without a Democratic candidate.
That doesn’t bode well for the party ahead of November, said Michael Card, professor emeritus of political science at the University of South Dakota.
“It doesn’t put them in a position to actually put forward their ideological policy preferences and have much of a success at getting those enacted,” Card said.
In the state Senate alone, Democrats have failed to field a candidate for 22 seats, which is nearly two-thirds of the chamber. In the House, Democrats have failed to field a candidate for 38 seats, which is 54% of the chamber.
There is only one Democratic legislative primary in the state: a state Senate race in District 26, which includes the Rosebud Reservation.
There are no statewide Democratic primaries, after announced candidates for governor and U.S. House dropped out or failed to gather enough petition signatures to make the ballot, leaving one Democrat in each of those races.
Statewide candidates will have less name recognition than Republican candidates ahead of the general election, since they didn’t have primaries, Card said. In the Legislature, Card said Democrats “are guaranteeing they won’t get a majority.”
In contrast, Republicans have primary races for governor, U.S. House and U.S. Senate. Five legislative districts do not have Republican primaries, but do have Republican candidates. There is a Republican candidate running for every legislative seat, except for one House seat in District 27, which includes the Pine Ridge Reservation.
Card said there are several factors leading to poor candidate turnout among Democrats, including a self-fulfilling cycle of failure.
“A lack of winning makes fewer people willing to take a chance on running for office,” Card said. “Why run if I think I’m going to lose?”
Democrats haven’t held a statewide office since 2015, and they haven’t held a majority of either legislative chamber since 1994.
Joe Zweifel, deputy executive director of the South Dakota Democratic Party, said the organization worked “really, really hard” to convince Democrats to run for office.
“But you can’t force people to run for office,” said Zweifel, of Sioux Falls, who’s running for a legislative seat himself in District 12.
He’s heard the open seats called a “failure.” But he disagrees, choosing to focus on the Democrats who did step forward.
“We’re running quality, good candidates in those races,” Zweifel said.
The South Dakota Democratic Party hopes to build on legislative successes, such as a new law from Rep. Kadyn Wittman, D-Sioux Falls, that commits state funding to cover the family portion of reduced-price school meals.
“That specifically is a return on investment for our donors, and it shows that Democrats are doing good things for the people of South Dakota,” Zweifel said.
Wittman’s success helped inspire Democratic District 13 House of Representatives candidate Ali Rae Horsted, of Sioux Falls, to take a second run at the Legislature. Horsted ran unsuccessfully for the Senate against Sen. Sue Peterson in 2024, garnering 42% of the vote.
Horsted plans to build on that success and the name recognition she already has in the district. She hopes she’ll have “better odds” in this election, since there are two House seats for every district.
Horsted said it would better serve South Dakota if the state had a more balanced Legislature. While the latest Legislature was 92% Republican, 52% of voters in South Dakota are Republican. South Dakota has the lowest percentage of Democrats, 7.6%, in the Legislature nationwide.
“I think it’s important that people have options on the ballot,” Horsted said, “and people are able to vote for candidates that represent their values and their vision for the future of South Dakota.”
Makenzie Huber is a lifelong South Dakotan who regularly reports on the intersection of politics and policy with health, education, social services and Indigenous affairs. Her work with South Dakota Searchlight earned her the title of South Dakota’s Outstanding Young Journalist in 2024, and she was a 2024 finalist for the national Livingston Awards.
South Dakota Searchlight is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
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From East River to West River, South Dakota communities share a common goal: creating places where people of all ages can live, work and thrive. AARP’s Domains of Livability provide a framework to help communities do just that. Through the AARP Community Challenge grant program—designed to spark quick, impactful local projects—South Dakota communities are turning big ideas into visible, people-centered improvements.
Read the South Dakota Community Challenge Grant Report, which showcases grant-funded projects across the state designed to build more livable communities.
What Are AARP’s Domains of Livability?
AARP’s approach to livable communities is rooted in eight interconnected domains that together support quality of life at every age:
- Outdoor Spaces and Buildings – Safe, accessible parks, streets and public buildings
- Transportation – Affordable, accessible options for getting around
- Housing – A range of choices that support independence
- Social Participation – Opportunities to connect, learn and have fun
- Respect and Social Inclusion – Communities that value people of all backgrounds and ages
- Civic Participation and Employment – Meaningful ways to engage and contribute
- Communication and Information – Clear, accessible ways to stay informed
- Community Support and Health Services – Access to services that support well-being
These domains work best when addressed together—something South Dakota communities are embracing.
Turning Vision into Action with Community Challenge Grants
AARP Community Challenge grants fund short-term, “quick-action” projects that can ignite long-term change. Across South Dakota, these grants have helped communities pilot ideas, build momentum and demonstrate what’s possible when residents put people first.
Here’s how local projects are bringing the Domains of Livability to life:
- Outdoor Spaces and Buildings: Communities have used grants to enhance parks, create pop-up public spaces, add benches and shade and install wayfinding signs. These improvements invite people to linger, gather, and enjoy shared spaces—supporting both physical activity and social connection.
- Transportation: Small, thoughtful transportation projects can make a big difference. Community Challenge grants have supported safer crossings, improved walkability and bikeability around key destinations and the planning or installation of transit amenities like shelters and seating—especially important for older adults and people with mobility challenges.
- Housing and Community Support: Some projects focus on helping residents age in place by improving access to information about home modification resources or by testing neighborhood-level solutions that connect people to services. These efforts strengthen independence and peace of mind.
- Social Participation and Inclusion: Murals, community events and creative placemaking projects funded by AARP grants have sparked community pride and social connection. By involving residents in design and implementation, these projects foster respect, inclusion and a strong sense of belonging across generations.
- Communication, Civic Participation and Opportunity: From hosting community conversations to creating new tools for sharing local information, South Dakota communities are using grants to engage residents in shaping their future. These efforts elevate local voices and encourage ongoing civic participation.
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