- Healthcare costs in the US are steadily rising due to administrative costs and the increasing use of technology.
- Rising prescription drug costs, chronic diseases, and an aging population are contributing factors.
- The lack of primary care physicians increases healthcare costs as patients depend on more expensive treatments.
- The National Disability Insurance Scheme and health insurance can help reduce healthcare costs and health savings accounts.
Healthcare is one of the most pressing concerns of Americans today, and rightfully so. With a rapidly aging population and the constantly increasing demand for medical services, it is no surprise that healthcare costs in the United States keep escalating steadily.
Average Costs of Medical Care
The United States spends more on healthcare than any other country in the world, yet the outcomes are not always the best. It’s estimated that Americans spend about $12,000 on healthcare costs annually. Here are some factors that affect healthcare costs in the United States and how they contribute to the steady rise of healthcare expenses.
One of the primary reasons behind the burgeoning healthcare expenses in the United States is the high administrative costs of healthcare. Unlike other countries where healthcare is largely publicly funded, the United States requires the involvement of private insurance companies in its healthcare system.
This results in a significant cost increase due to the need for medical billing, claims processing, and other administrative overheads. While using private insurance companies may ensure patient choice, it also creates additional complexity and cost. Administrative expenses make up a significant chunk of medical costs in the US. It is estimated that switching to a public insurance model – or adopting a single-payer system – could reduce these expenses by up to 50%.
Increasing Use of Technology
Another significant reason for the increase in healthcare costs is the growing reliance of the medical industry on technology. While advances in medical technology have resulted in improved care and a higher success rate of medical procedures, these technological innovations come at a tremendous cost.
From expensive imaging machines to state-of-the-art surgical equipment, the use of technology in the medical field has resulted in higher expenses for hospitals and clinics – an increase in expenses that are inevitably passed on to patients.
Rising Prescription Drug Costs
The skyrocketing costs of prescription drugs in the United States significantly contribute to the increase in healthcare costs. According to the Kaiser Family Foundation, prescription drug costs rose by 10.3% in 2019, much higher than the overall inflation rate.
While drug makers would argue that research and development costs drive up the price of drugs, the high prices of prescription drugs in the US compared to other countries such as Canada and the UK cannot be justified based on research and development expenses alone.
Chronic Diseases and an Aging Population
A surge in chronic diseases and an aging population have contributed significantly to the rising healthcare costs in the United States. According to the CDC, 7 out of 10 deaths in the United States are caused by chronic diseases such as heart disease, obesity, diabetes, and cancer.
Managing these chronic diseases requires ongoing, frequent medical care, which can quickly increase costs, especially for seniors with complex underlying health conditions. As life expectancy increases, it only exacerbates the situation and puts further strain on the healthcare system.
Lack of Primary Care Physicians
Finally, the lack of primary care physicians in the United States has also increased healthcare costs. Patients who visit emergency departments frequently often do so because of a lack of access to health care providers.
Primary care physicians provide a variety of preventive, diagnostic, and treatment services, which can help reduce visits to emergency rooms and associated healthcare costs. Hence, a shortage of these healthcare professionals could increase healthcare costs, as patients are forced to rely on more expensive treatments.
Ways to Avoid These Costs
Thankfully, there are ways you can avoid these costs. Here are some ways to do that:
National Disability Insurance Scheme
You can take advantage of various programs to reduce your healthcare costs. The National Disability Insurance Scheme (NDIS) is one such program that helps fund a range of supports for people with disabilities and their families.
By availing of the NDIS, you can access various services – from medical treatments and therapies to assistive technology and home modifications – at your leisure. You can hire an experienced NDIS plan manager to help you out. These managers can help you find the best services for your needs and ensure you get the most out of your NDIS funding.
Having health insurance is essential to reducing healthcare costs. Health insurance helps cover some medical expenses, including doctor visits, medications, hospital stays, emergency care, and preventive care. It also ensures that unexpected medical bills are covered, so you don’t have to worry about them.
It’s important to research the different types of health insurance available and choose one that best suits your needs. It is also essential to be aware of any additional costs associated with the policy, such as deductibles and copayments.
Health Savings Accounts
Another way to reduce healthcare costs is to set up a health savings account (HSA). This type of account allows you to save pre-tax money for medical expenses and withdraw from it without paying taxes.
An HSA can help cover the cost of doctor visits, medications, dental care, vision care, and more. It’s important to note that an HSA may not necessarily provide the same coverage as a health insurance policy.
It’s essential to research your options and ensure you get the best coverage for your needs.
As healthcare costs in the United States continuously rise, it’s essential to be aware of the factors driving them and take steps to reduce them. By taking advantage of programs, you can ensure that your medical expenses are minimized and that you get the care you need at an affordable cost.