Cost Of Health Care

Rising medical costs are a worldwide problem, but nowhere are they higher than in the U.S. Although Americans with good health insurance coverage may get the best medical treatment in the world, the health of the average American, as measured by life expectancy and infant mortality, is below the average of other major industrial countries. Inefficiency, fraud and the expense of malpractice suits are often blamed for high U.S. costs, but the major reason is overinvestment in technology and personnel.

Health care expenses are a never ending headache that create numerous liabilities. Liabilities are created when goods or services are purchased on credit and obtained through short- term and long- term loans. Health care expenses create liabilities such that payments are made late or no payments are made at all. In some cases, the cost of health care expenses are unaffordable resulting in those type of payments. To prevent large health care debt, many individuals seek health insurance. Health insurance is provided by private insurance companies or by the government. It covers health care expenses and provides the necessary health care. Although, health insurance is necessary it can also be very costly.

Health care costs have been rising for several years. Expenditures in the United States on health care surpassed $2.3 trillion in 2008, more than three times the

“The amount people pay for health insurance increased 30 percent from 2001 to 2005, while income for the same period of time only increased 3 percent.” (Source: Robert Wood Johnson Foundation). The rising cost of healthcare is a huge problem in America today. In this paper I will analyze the different issues and causes for the increase in cost.

When it comes to health care, cost is one of the biggest problems. Something needs to be done in order to make it possible for patients, families, and businesses to be able to afford health care. US does not always spend health care dollars in the most productive way. The cost of cancer treatments alone can cost up to hundreds of thousands of dollars, and the only way to pay for that is to raise the cost of the insurance to the patients. Cost is defined as the “price” of healthcare. The “price” or cost can come from various places such as, the physician’s bill, the cost of prescriptions, as well as what the employers pay to cover their employees. The cost of treatments, emergency room visits, medicines, the cost of newest technology and etc. is what is making our increase in cost rapidly. The rising costs leads to becoming a financial burden to families, even the ones that have health insurance, which can typically result in individuals not receiving the health services that they need.

The cost of healthcare has and will continue to rise in the United States. Some factors that contribute to those hikes are due to the consumer demanding more complex services from health care providers. Things such as new technology, equipment, research and testing procedures, along with pharmacy, and the number of uninsured are all dynamics of the increased cost in health care. The U.S. health care system relies heavily on third-party payers; these payers include commercial insurers and the Federal and state governments. According to the Centers for Medicare and Medicaid Services, or CMS, the National Health Expenditure grew 3.6% to $2.9 trillion in 2013, or $9,255 per person, and accounted for 17.4% of Gross Domestic Product (GDP). Id.

One of the key aspects that lead to the financial hardships of Americans when it comes to healthcare coverage is the expensiveness of the coverage. The expensiveness of the coverage can be attributed to quite a few factors that directly and indirectly raise the cost. The number and type of technology used in hospitals, clinics, and other medical institutions absolutely affect the rising cost in healthcare (Ferlie &

Health care is the upkeep and improvement of physical and mental well being. It is conveyed by experts in united health, dentistry, birthing assistance obstetrics, medication, nursing, optometry, drug store and other care suppliers. It alludes to the work done in giving essential care, optional care, and tertiary care, and in broad daylight health. The United States alone populates 314 million individuals, out of this unbelievable number just 60 million were uninsured. There are three significant issues in healthcare today; billions of dollars are continuously squandered and costs are soaring, the trade commercial center, and unnecessary care and endures motivation by the way we pay for care.

The fact is that the U.S. spends more money on health care than any other country in the world, even when adjusting for relative wealth, according to a 2008 study by Mkcinsey Global Institute (MGI). In 2012 that number was about 2.6 trillion dollars or 18.6% of their gross domestic product (GDP) (13), in other words the U.S. spent about 8,915 dollars per person on health care, or more than twice what they spent on food and more than China spent on all goods and services combined (See Figure 1, MG1 2008). The amount spent on health care is expected to continue to rise , though that rise has slowed in the last three years, estimates suggest it could reach nearly 4.8 trillion dollars by 2021; which would be roughly one fifth of the U.S. GDP (15)

Healthcare spending growth rate trends show astounding estimates. Since 1960, spending has risen from $27 billion ($143 per capita, 5.1% pf GDP) to amazing $1,678.9 billion ($5,670 per capita, 15.3% of GDP, 2003 data) (HHS, 2005). Recent research estimated that by 2013, healthcare spending will be as high as 18.4% of the Growth Domestic Product. It is important to note that the gradual move from hospital to ambulatory setting has resulted in much higher spending on outpatient hospital services and prescription drugs. The spending growth for these two trends is much higher than the overall healthcare cost growth, which, in fact, increases faster than such important economic indicators as GDP growth, inflation growth, and population growth rates.

This is a very important question as we grapple with the rising costs of health care. There are many possible sources for this rising cost, including: increased availability of expensive technology, the aging population, defensive medicine and tort costs, public health problems such as obesity, overuse of medical procedures, poor access to care leading to delayed treatment or

There are many areas that offer different opportunities to reduce health care spending while improving Medicare and Medicaid cost for individuals. Over 30% of healthcare spending is mostly unnecessary care. Cost of healthcare will most definitely become a concern for thousands of individuals and their families. Health care plans like Affordable Care Act (ACA) and other health care plans have a great opportunity to help improve better care at a lower cost. Healthcare plans play a big part in transforming the United States healthcare system. The United States a lot of money on healthcare than other countries. Paying high insurance claims does not mean you are getting more. Many people have pointed out many ways that healthcare workers in the

According to Robert Carroll, (2007) health care costs continue to rise in the United States. The growth of health care costs has been exceeding the GDP growth by two percentage points annually since 1940. These rising costs impose a substantial burden on the U.S. economy. Higher spending on public programs like Medicaid and Medicare strains state and federal budgets. Higher insurance premiums pose a challenge for employees and burden workers with higher health costs and lower wage increases.

Traditionally the American health care system relied heavily a repayment model referred to as fee-for-service which is described as a form of repayment that generates a greater emphasis on the volume of patients seen rather than healthy outcomes produced under a physician’s care. The fee-for-service repayment method poses multiple issues such as: duplicating services which in turn renders some of the services unnecessary, utilization of expensive technology because of the revenue generation rather than as a valuable diagnostic tool and crowding caseloads to an unmanageable level in order to achieve highest level of reimbursement. The aforementioned events not only have the possibility of being unethical but also drive up the cost of health care in the United States. Currently, health care costs have not only increased, but the Office of the Actuary projected that U.S. healthcare spending will make up nearly 20 percent of the economy in 2019. One would argue that if as a country we are spending so much on health care that we should be a “healthier” nation, but this is not the case. Even though America continues to be the largest spender on health care, collectively we experience a lower life expectancy rate compared to other industrialized countries (hfma.com, 2011, p. 2). To assist with climbing health care rates healthcare purchasers have called for repayment reform. One such reform that has been on the forefront is Value-Based Health Care (VBH), also known as outcome

The United States of America is spending far more on health care than any other country of the world that is about 16 % of the GDP. But these health care cost are not stable, in fact these costs are going up with the each passing year. But the cost is not the only dilemma, health care quality as compared to the cost is far worse. After spending $ 2.7 trillion annually on health care results are not as expected. This research paper elaborates various reasons of the rising health care costs, which include higher prices for medical services, defensive medicines, paying for volume over value, lack of transparency, aging population, new drugs and technologies, less availability of information to the consumers etc. Reduction in demand for medical