Rising Healthcare Costs
According to the World Health Organization’s Global Health Expenditure Database, Healthcare spending in the U.S. has almost doubled over the past two decades (WHO 2022). Healthcare costs have reached $4.1 Trillion compared to the year 2000 when health spending was $1.5 Trillion (HEALTH SYSTEM TRACKER 2022). Despite the rising cost of healthcare, compared to other developed countries, the U.S. population’s health is in decline (Hayajneh 2021). Health insurance premiums and deductibles are one of the main driving forces for the rise of healthcare. The excessive price of deductibles not only costs Americans millions of dollars each year but also deter Americans from Preventative and Ongoing care, which leads to greater costs, which lead to Emergency care. Most economic and healthcare experts agree that treatment of ongoing chronic or terminal conditions is driving healthcare costs up. However, external factors such as inflation as well as fraud contribute to a huge portion of the blame as well.
There are three main reasons for the rising healthcare costs. The First reason for the rising healthcare costs is the for-profit aspect of the healthcare system. In the U.S., healthcare is a for-profit-based system. All services and visits are itemized at the highest cost possible. The healthcare system is based on quantitative care rather than providing quality healthcare. The second reason for high healthcare costs is the treatment of the growing unhealthy and aging U.S. Population, which requires a growing number of treatments for chronic health issues. The third issue for the rising healthcare costs is the rising cost of health insurance premiums, deductibles, and copays. Aside from the rising insurance premiums, an average deductible is approximately $4,500. That means that a patient would first need to spend $4,500 before the insurance carrier begins to pay for any medical bills.
The U.S. for-profit-based healthcare system gives doctors ample opportunity to nickel and dime patients as well as insurance companies for every possible visit, treatment, test, medication, and medical equipment. Each visit regardless of the nature of the visit is billed to the patient or insurance company at the highest cost possible regardless of whether the medical issue has been resolved or not. More specifically, the concept of “Surprise Billing.” Surprise billing is when out-of-network doctors over-charge patients without their knowledge. (Consumer Financial Protection Bureau 2022). For that reason, the U.S. Government approved the “No Surprise Act.”
What compounds the issue of the for-profit healthcare system is when the patients are forced to see a second or third opinion for the same medical problem. It is my opinion that doctors steer clients to the most expensive treatment that is available to either treat or cure the patient’s medical conditions. Many doctors also prefer medically unnecessary surgeries instead of conservative treatment, which may be available. A prime example of such instances are soft tissue injuries, most of which can be treated with conservative treatment.
The main negative aspect of the U.S. for-profit system is the incentive doctors over-charge for maximum profit. Physicians regularly overbill insurance carriers for treatment services, medication, or medical supplies. According to the Statistical Brief by the Medical Expenditure Panel Survey (MEPS) which was done in 2016 but published in 2018 (MACHILIN 2018), the average cost per visit to a physician range between $159-$419. Just to ask a patient how the patient is doing with the treatment.
The U.S. Population is increasingly growing unhealthy. According to a recent study done by the CDC (Center for Disease) control, at least half of the U.S. population suffers from at least one chronic condition such as heart disease, diabetes, or asthma (BOERSMA 2020). A distressing 85% of healthcare costs are attributed to the care of chronic conditions (HOLMAN 2020). Prevalent chronic conditions such as diabetes, heart disease as well as diseases such as cancer, create a huge financial toll on the American population billions of dollars per year. Diabetes alone affects 35 million Americans with a whopping cost of $235 Million dollars per year and rising. A 2010 study that was done to project the growth of Type I and Type II diabetes in 2010, shows that in 2008, 8 cases out of 1000 people had diabetes. The projections show that by 2050, 15 out of 1000 people will have Diabetes (BOYLE 2010). According to Medicaid data, each treatment session costs approximately $500. According to a study done by the American Diabetes Association (2018), three treatments per week adds up to $75,000 per year.
Aside from the actual medical expenses, economic Loss or loss of productivity in the workforce is a byproduct of the growing population with Diabetes. Due to the extensive ongoing treatment for diabetes, which leads to lost time from work, the U.S. workforce loses about $90 Billion dollars on reduced productivity. For the population with the more advanced stage of diabetes, aside from medication, the loss of productivity is due to time lost for dialysis treatment. Dialysis treatment is usually three times per week with approximately four hours each session. This forces people who have advanced stages of diabetes to either not work or work part-time.
Another chronic disease, which is costing Americans billions each year is heart disease. Due to the rise in obesity, heart disease is also on the rise, which adds to the list of chronic diseases that the U.S. Population is currently suffering from, which require extensive and expensive treatment. According to the CDC, every year, close to 700,000 people die from heart disease, making it the leading cause of death in the United States. As of 2018, 30.8 million people were diagnosed with heart disease. CDC also states that coronary artery disease is the leading cause of most heart attacks, which are usually a result of obesity. Coronary artery disease is caused by the blockage of the arteries. The blockage in the arteries prevents the heart from supplying blood, which supplies oxygen and crucial nutrients throughout the body.
According to data published on HealthLine.com in 2020, approximately $11 trillion was paid for cardiac care. Treatment for heart disease and coronary artery disease include Bypass Surgeries, Open Heart Surgeries, Pacemaker Installations, Cardiac Monitoring and even heart transplants. The average price for a Bypass surgery, which is a surgery to use a healthy blood vessel to bypass a clogged artery costs Medicaid approximately $200,000. A heart transplant can cost as much as $1.5 Million for the surgery itself. Not counting a lifetime of ongoing care, monitoring and prescription medication.
The high cost of insurance premiums as well the astronomical cost of deductibles, cost Americans thousands of dollars each year. “The average premium for single coverage in 2020 is $7,470 per year.” (KFF 2020)9. The average premium for family coverage is $21,342 per year. That number is growing each year. The predominant cause for continuing rise in healthcare premiums and deductibles is due to the growing number of chronic conditions such as heart disease and diabetes as well as disease prevalence such as HIV/AIDS and Cancer. Aging population also plays a huge role in higher premiums. According to Statistica.com (O’Neill 2022), life expectancy in 1920 was 52 years old. Compared to 2020, life expectancy grew to 78 years old. The aging population requires more ongoing care.
One of the main factors that drive high insurance premiums is tobacco use according to the MoneyCrashers.com (FREEMAN 2022). According to the CDC (Centers for Disease Control), tobacco use contributes to 480,000 deaths per year. Insurance carriers see cigarette smokers as much higher risk compared to people who do not smoke. Especially when a person is a much older adult with chronic issues.
With a combination of a profit-based healthcare system, where doctors seek to nickel and dime for their services and supplies, a growing unhealthy population with chronic conditions and rising insurance premiums, the price for healthcare is only going to go up. Many research studies have been done to attempt to reduce the costs of healthcare, however, the healthcare costs are still persistently high and keep rising every year. Mostly due to chronic conditions and the growing number of unhealthy habits such as tobacco use.
References:
American Diabetes Association. (2018, March 22). Economic costs of diabetes in the U.S. in 2017. American Diabetes Association.
Amy Freeman. (January 2022). 5 Factors that affect your health insurance premiums. Money Crashers. https://www.moneycrashers.com/factors-health-insurance-premium-costs
Boyle JP, Thompson TJ, Gregg EW, et al. Projection of the year 2050 burden of diabetes in the US adult population: dynamic modeling of incidence, mortality, and prediabetes prevalence. Popul Health Metr. 2010;8:29.m https://pubmed.ncbi.nlm.nih.gov/20969750/
What is a “surprise medical bill” and what should I know about the no surprises act? Consumer Financial Protection Bureau. (2022, February). https://www.consumerfinance.gov/ask-cfpb/what-is-a-surprise-medical-bill-and-what-should-i-know-about-the-no-surprises-act-en-2123
Employer Health Benefits Survey (2020). Kaiser Family Foundation.
Global Health Expenditure Database (2022). World Health Organization.
https://apps.who.int/nha/database/Select/Indicators/en
Holman H. R. (2020). The Relation of the Chronic Disease Epidemic to the Health Care Crisis. ACR open rheumatology, 2(3), 167–173. https://doi.org/10.1002/acr2.11114
Jen Thomas. Deborah Whitherspoon, Ph.D, MSN. (July 2020) Heart Disease: Facts, Statistics and You. Healthline. https://www.healthline.com/health/heart-disease/statistics
Machilin, S., & Mitchell, E. (2018, October). STATISTICAL BRIEF #517: Expenses for Office-Based Physician Visits by Specialty and Insurance Type, 2016. Medical Expenditure Panel Survey.
https://meps.ahrq.gov/data_files/publications/st517/stat517.shtml
Nisha Kurani, Jared Ortaliza, Emma Wagner, Lucas Fox, & Krutika Amin (25 February 2022). How has U.S. spending on healthcare changed over time? Health System Tracker.
O’Neill, A. (2022, June 21). United States: Life Expectancy 1860-2020. Statista.
https://www.statista.com/statistics/1040079/life-expectancy-united-states-all-time
Peter Boersma, MPH, Lindsey I. Black, MPH and Brian W. Ward, PhD. (2020). Prevalence of Multiple Chronic Conditions Among US Adults. Centers for Disease Control. https://www.cdc.gov/pcd/issues/2020/pdf/20_0130.pdf
