Studies show that the United States now spends more on healthcare services compared to any other countries. The total cost of medical care now exceeded $3 trillion, which accounts for more than 18% of the GDP.
Medical spending also tends to rise year by year than inflation and affects the economy as a whole.
We have heard about the increasing cost of employer-sponsored insurance and why the system had broken employees and employers now. But, what is the reason behind the rise of expense in healthcare? Further, in this article, we will explore some major reasons why healthcare costs are alarmingly rising.
Reasons why the cost of US medical care is rising
- Medical insurance providers are rewarded for doing more, not for being efficient
Most of the leading insurance providers tend to offer doctors, hospitals, and other medical service providers in terms of service fee which reimburses for the visits, tests, and procedures. Adding to it, the medical system is also not integrated which ends up in repetitive tests and also over-treatments.
- People grow sicker, fatter, and older
It is estimated that almost half of the US population faces any one of the chronic conditions like diabetes, asthma, cardiac problems, etc., which heightens the treatment costs. Two-third of the older adults is now obese, which too leads to some terminal illnesses and in turn, inflated spending on medical care.
- All new medical technologies and medications are expensive
Technology advancements in healthcare can surely improve human well being and extend the lifespan, but all of these come out at a high cost. As Pharma Quotes points out, doctors and patients demand the newest and most advanced treatments, which are expensive even if there is not enough evidence for their effectiveness.
- Employer-sponsored healthcare plans are tax-free, so consumers need not to have to pay for healthcare
Many of those have insurance through employers. This makes individuals disconnected from the decision-making process about the cost of their treatments and the coverage. This prompts the providers to escalate the cost as the direct service takers are not affected by it.
- There is little information to the consumers to make knowledgeable decisions about medical care
Despite the explosion of knowledge in the information era of computers and internet, there is no easy and quick way for the consumers to understand various treatment options and cost involved in those. We may not buy a car without doing thorough research by comparing options, checking the features, models, mileage, and payment options. However, this is not applicable in the same way in terms of healthcare.
- Medical facilities gaining a fair market share and tend to demand higher prices
Business partnerships and mergers are now happening with hospitals and insurance providers at a higher rate now, which may enhance the efficiency of medical care, but on the other hand allows monopolies in the market, who always love to drive up the prices. We can see that hospitals are buying up their rivals and directly employing the physicians to create larger medical systems.
These are only a few reasons, but there are many other contributing factors to drive up medical care costs lately. If it essential for the public to be aware of these to find out smart way outs to limit their individual cost of healthcare and lead and healthy and happy life.