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Health Care Costs in the U.S.: Will They Ever Improve?

Spending on health care in the U.S. is projected to continue to grow 5.6% per year between now and 2025, and by the time 2025 rolls around, health spending will make up 19.9% of the total GDP.

The Affordable Care Act aimed to ensure more Americans could afford health insurance. It helped more people sign-up for health insurance and expanded Medicaid, but nothing in the law attempted to deal with the prices of healthcare nor the reasons behind the growing costs.

If health care costs are ever going to improve, Americans need to do more than sidestep the rising costs of care and prescriptions. They need change in some form.

Why Healthcare Spending Is Surging

Healthcare spending as a whole is growing as are all of the components, including hospital care, physician and clinical services, and prescription drug spending. What is more, the Centers for Medicare and Medicaid Services (CMS) projects that spending will grow faster over the next five years than it has over the past five years. Why is this happening? The CMS says there are two factors: higher prices and the aging populations. The combination of the two could lead to an annual average growth rate of 2.5% per year for the next decade.

These explanations still don't clarify why U.S. healthcare is so expensive in the first place. After all, the issue of the aging population isn't unique to the U.S.: it is also putting pressure on other types of health systems, like the UK's single-payer National Health Service. Additionally, many other countries are also having a healthcare cost crisis. Though, a recent study from the Harvard Chan School found that inflated prices may be the norm in the U.S. -- and not in other countries.

While health care spending is complicated and there are no clear answers -- not even single-payer health care policies -- there is one thing that we do know. Because of a lack of health literacy and our complex payment system means we spend more than other countries on administrative costs. These administrative costs seem to be at least one place to start for both providers and patients trying to manage the costs of care.

How Americans Are Getting Creative to Manage Costs

One of the best ways for employers to save money is to have a thorough understanding of health insurance policies their companies provide. The more an employer can balance cost with coverage, the better. But if the policies are neither cost-effective nor comprehensive enough, both patients and healthcare providers have implemented creative ways to manage the costs of health care.

Some of the more creative ways to access medical care in the U.S. have been leaving the country through a system known as medical tourism. Going abroad for medical care means getting quality care from hospitals that largely cater to Americans seeking care. Although the statistics on the practice are difficult to compile, some believe that as many as 750,000 Americans went abroad for medical care in 2007 alone.

Americans are getting more creative at home, too. For example, there's an increasing number of doctors who charge cash-only and refuse insurance. By cutting admin costs associated with insurance, they say they provide more accessible primary care, which also keeps their patient list healthier and requires fewer visits. At Spark MD, in Boise, ID, the clinic accepts 600 patients and runs a monthly subscription that allows patients access to common procedures, same-day sick visits, and physicals.

Patients are trying to by-pass going to the doctor unless necessary with home health testing kits. With kits like these, Americans can test themselves for STDs, which are still common in the US, food sensitivities, thyroid issues, Lyme disease, HPV, perimenopause, and hormonal imbalances. For the cost of a doctor's visit, they get labwork without worrying about their deductible. Whether or not these tests truly cater to patients' health needs is another question, and the tests don't replace a consultation with a medical professional. However, they do put some power back in the hands of the patient and make at least initial costs transparent.

What's Involved in Long-Term Change

Doctors running cash-only practices and at-home STD testing may help with regular out-of-pocket costs, but they don't tackle the problem at large, like the extortionate cost of prescriptions and specialist testing as well as the unknown but huge administrative costs passed on to patients. How does the U.S. solve its health care crisis before it consumers a full quarter of the GDP?

There are a million ideas ranging from eliminating insurance companies entirely to reevaluating the costing system and "bending the cost curve." No one knows what most of these options look like in the U.S. marketplace, particularly because the solution is so far overdue (this is a question Americans have been asking for decades).

No matter what the proposal -- whether radically different or radically indifferent -- perhaps the place to start is to finally establish how much health care costs. The basic principle underlying cost control is understanding what the prices are and how the price is justified. It is a mammoth task, but one that must be done whether American continues to rely on private insurance or shifts to a single-payer plan.

If America is going to attempt to fix the health care spending crisis, then it must start somewhere and identifying those costs seems like a smart place to start.

Posted by Magnolia at November 27, 2019 10:30 AM
Comments
Comment #451181

True. Identifying the costs is a good start.
And the Trump Administration’s announcement of a historic “Price Transparency Requirement” will increase competition and help lower healthcare costs (not to mention the Trump administration’s other accomplishments).

However, for anyone truly serious about wanting to reduce healthcare costs, the following should be done to save many hundreds of billions per year:

  • (01) Stop allowing illegal immigrants to receive free healthcare, medicaid, welfare, social security, and having anchor babies, of which 70% of all births at Parkland Hospital in Dallas, Texas.
  • (02) Stop massive illegal immigration, promoted by Democrats, which costs U.S. citizens $274 Billion per year (if not much more) in net losses, which does not include the untold cost of crime and 2,000 homicides per year by criminal non-citizens;
  • (03) Stop $70 Billion per year in Medicare waste, fraud, and corruption;
  • (04) Stop the doctors and prescription drug companies that are contributing to the drug addiction crisis;
  • (05) Stop electing politicians (in BOTH parties) who refuse to secure the borders and refuse to stop the dangerous drugs flowing through our borders and ports (largely due to open and porous borders, and greedy employers, and for-sale politicians that like cheap labor and Democrats who also like the electoral votes when illegal immigrants are counted in the DECENNIAL CENSUS);
  • (06) Stop the violence and 2,000 homicides per year by criminal non-citizens;
  • (07) Reject the open-borders Democrats who have been despicably pitting U.S. citizens and illegal immigrants against each other for years, with the ulterior (despicable) motive of acquiring more electoral votes, based on the DECENNIAL CENSUS, which does not verify citizenship; Democrats are using massive illegal immigration, promoting sanctuary cities and states, making promises of citizenship and free stuff to illegal immigrants, in order to attract more and more illegal immigrants to the U.S.; Democrats also want to give illegal immigrants drivers’ licenses where they can also be automatically registered to vote; this is the Democrats’ despicable scheme to turn RED states to BLUE states;
  • (08) Reject the Democrats that promote voting rights for illegal immigrants, more sanctuary cities and states, and want to give healthcare, drivers’ license, and all sorts of free stuff (including healthcare) to illegal immigrants (including illegal immigrants who have committed felonies, and have already been deported many times); Democrats denied funds for border security, and are fighting for open- borders, despite the massive costs, conservatively estimated to be $0.75 Billion per day ($274 Billion per year) in net losses;
  • (09) Reject Democrats’ fake claims of voter suppression; especially since 81% of people convicted of voter fraud are Democrats (based on the Voter Fraud database [1979 to 2018]); Requiring a voter to be alive and breathing, show an ID for the voting jurisdiction, and be a U.S. citizen is not voter suppression;
  • (10) Stop the widespread illegal voting by illegal immigrants;
  • (11) Stop voting for Democrats that are doing this today, and have done this for the last 155+ years, which is all helping to destroy the U.S.A.
  • (12) Stop voting for Democrats that waste massive money and time while abusing their power and pursuing serial investigations and hoaxes;
  • (13) Beware of Democrats making promises of all sorts of free stuff (which they also want to give to illegal immigrants);
  • (14) Also see … ;
Therefore, all of those recommendations would save MANY hundreds of billion$, and possibly trillion$ of dollars per year.

Posted by: d.a.n at November 27, 2019 11:55 AM
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