It’s Not You, It’s a Broken System: Why You Keep Spending More on Health Care

Despite the fact Americans were not using any additional health care, the cost significantly increased in 2016. According to a recent report, this is due to consistently rising costs. According to the President of the Health Care Cost Institute, Niall Brennan, a conversation regarding the increases in costs in health care spending must take place on the national level. This organization is nonprofit, non-partisan, and places their focus on the cost and utilization of health care.

During an institutional news release, Niall Brennan spoke of the progress made in value-based health care the past few years, but stated Americans have begun paying more for less care. He believes the industry is growing so quickly due to the rising prices for prescription drugs, visits to the emergency department and surgery. The yearly Utilization Report and Health Care Cost annual report was released by the institute on Tuesday. The use of health care spending between 2012 through 2026 was analyzed for individuals age 65 and below with health insurance sponsored by their employers. The data analyzed by the researchers showed almost forty million people had made approximately four billion claims.

During the course of the five years studied, the report showed an increase of 27 percent in the cost of prescription drugs. The pricing for numerous generic drugs decreased or remained the same, and the study showed less people were using prescription drugs with a brand-name. The reason for this was attributed to the price increase causing double-digit pricing for the brand-name prescription drugs. The study additionally demonstrated although there was only a slight rise in the number of visits to the emergency room, the average ER visit pricing still increased by 31.5 percent during this period.

Both outpatient and inpatient pricing for surgery also rose. There was an average price increase of thirty percent, or $10,000 for inpatient surgeries. This was despite the fact this type of surgery declined sixteen percent. The cost for outpatient surgery saw an increase of over nineteen percent. Due to the substantial drop in the number of visits for primary care offices, there was a decrease in cost of six percent in this area. Office visits for specialists increased 31 percent, and there was a 23 percent rise in the cost for preventative care visits. According to the report, it is possible a portion of these costs could be due to the way people are looking for care, and billing practice changes.

The out-of-pocket costs for patients has been increasing every year, but the rate is slower than the health care spending total. The report attributed this to the patient’s costs for prescriptions. According to Niall Brennan, the direct impact of the out-of-pocket payments may not be felt as much by individuals with insurance sponsored by their employers. He additionally stated they are still paying the costs due to a decrease in their benefits, and an increase in their premiums.

More money is spent for increasing health care costs in the United States than in any other country. The costs exceed 2.6 trillion per year, and the pharmaceutical companies play a large role in these costs. Medicare and most insurance companies pay hospitals, physicians and medical providers a specific fee for each service, visit, procedure and test. When this is combined with the fact the medical system is not integrated, the results are the encouragement of repetitive tests, overtreatment and rising costs. This was the conclusion of the report by a Washington D.C. think tank called the Bipartisan Policy Center. They believe a flat rate for each individual condition or care episode would effectively streamline the rising costs. They additionally feel repeated and unnecessary tests, and improved coordination is possible with electronic medical records.

There is also not enough information available to ensure the best decisions are made regarding what medical care is necessary. Although there is a lot of information available through the internet, medical journals and the press, there is no standard currently available to discern the best possible treatment for the patient. Even when evidence has proven a treatment is not effective, or even harmful, it can take years before physicians stop offering the treatment. When a patient has no choice but to undergo additional treatment, this becomes a significant factor in the cost of health care.

Another problem concerns the patents for new, technologically advanced drugs. While these drugs can potentially save lives, they are marketed at an extraordinarily high price. The generic versions are not available for numerous years, and many patients are in desperate need of these drugs. A large portion of insurance companies and Medicare will not pay for these prescriptions, so the cost falls entirely on the patient. There is no doubt drugs purchased within the United States cost more than the same drugs in other countries.

Health care providers including hospital are consistently increasing their market shares, and this enables them to demand higher costs. Although partnerships and mergers between the insurers and medical providers can sometimes decrease prices and improve efficiency, this type of consolidation often causes the prices to rise even higher. In some markets companies have established near-monopolies, and reports show this is increasing the cost of health care. When a hospital purchases their rivals, hires their own physicians, and creates a much bigger medical system, this consolidation should drive the prices down, not upwards.

Despite the knowledge that healthcare in the United States is currently no longer affordable for many individuals, the prices continue to rise. This had led to a healthcare system that is broken, and solutions must be found, and implemented to begin the process of repairing the damage.