Rising Costs Healthcare USA
In the last 17 years, there has been an alarming but not unexpected 43% increase in the overall healthcare spending in the United States. For many years, the cost of healthcare has been a main issue for Americans and it is now considered a leading deficiency in America’s healthcare system. Healthcare costs in 2015 accounted for almost 20% of the United States economy. The high costs of healthcare can be associated with population growth, service price and intensity, population aging, service utilization, and disease prevalence or incidence. Pricing intensity has contributed to over 50% increase in healthcare costs while population growth and aging have both contributed to almost 35% increase in the cost of healthcare (CMS, 2018). Disease prevalence is among the few factors that have not contributed to an increase in healthcare costs in America by decreasing the costs by 2.4%. The life expectancy of American’s has increased and this leads to an increase in spending.
Many of the healthcare spending categories in the United States have continued to increase as witnessed in their significant growth in expenditure amounts. The cost of healthcare can be measured by analyzing where American’s spending most of their money in the healthcare industry. Hospital care increased to $1 trillion in 2015 and this accounted for 32% of America’s healthcare spending. Inflation and other non-price factors have also led to a 6.3% increase in physician’s care costs in 2015 (Clayton & Michael, 2015). The increase in cost of services is mainly witnessed in the clinical services environment especially the ambulatory physician.
Increase in healthcare costs was also contributed by an increase in the cost of prescription drugs. In 2015, the pharmaceuticals recorded the highest increase in costs and accounted for at least 10% or $ 320 billion of the healthcare costs. America’s healthcare industry also recorded an increase in the cost of nursing facilities and residential or personal care services. These cost of these services increased as Medicare spending rose leading to a 5.6% increase in the increase of costs in 2015 (CMS, 2018). The healthcare industry, however, has witnessed a reduction in the cost and spending in nondurable medical products, for example, over-the-counter medicines and surgical dressings.
America currently spends 18% of its $2.9 trillion GDP on healthcare costs which is about $9,200 per person every year. Healthcare is currently seen or considered more of an industry or business venture. The pharmaceutical companies have contributed to medicine has been corporatized leading to increase in administrative costs. The corporatization of medicine has also led to an increase in the cost of healthcare devices which has been a major contributing factor in the rising of healthcare costs (Clayton & Michael, 2015). Specialty drugs, for example, Gleevec which is used for chronic myeloid leukemia are increasing in cost at high rate. Pharmaceutical companies argue against the notion that their profit margins are very high and that they can well with less money (Rosen, 2015 ). The companies argue they require to maintain their profit margins to increase the availability of funds used for research and discovery of new and improved medications. Compared with other countries, where healthcare costs are low, pharmaceutical companies argue they are the world’s medicine chest because they invest much in research and development.
Spending on prescription medicine, including provider-administered drugs and pharmacy sales, has roughly remained stable since 1960 despite an introduction of more than 450 new medicines. Spending on prescription drugs has in most times grown in line with the overall healthcare spending. It is therefore clear that hospital, clinical, and physicians’ services have accounted for the largest part in the increase of healthcare costs in America. Hospital costs and doctor payments should be managed to help control the cost and quality of healthcare in the United States.
References
Clayton, L. A., & Michael, B. W. (2015). An American Health Dilemma. Routledge.
CMS. (2018). National Health Expenditure Data. Retrieved from www.cms.gov: https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html
Rosen, G. (2015 ). A History of Public Health. JHU Press.