One of the most significant health policy issues facing the United States is the continuing rise of health care costs. After reviewing the background readings and doing independent research, write a 3-page paper discussing the factors that have contributed to this. Your paper should be based on fact, not opinion. You must cite reliable sources in support of your discussion.
Introduction
The rising costs of healthcare in the United States are a pressing issue that has drawn significant attention from policymakers, researchers, and the public. This paper will discuss the factors that have contributed to the increasing healthcare costs. The analysis will be based on factual evidence obtained through a review of scholarly articles, policy reports, and government data.
Factors Contributing to Rising Healthcare Costs
1. Advances in Medical Technology
One significant factor contributing to rising healthcare costs is the rapid advancement of medical technology. While technological innovations have undoubtedly improved patient outcomes and quality of care, they also come with substantial costs. New technologies often require substantial investments in research and development, production, and the training of healthcare professionals. These costs are ultimately passed on to patients through higher healthcare prices and insurance premiums. Additionally, the utilization of newer technologies and procedures may contribute to overutilization and lead to unnecessary and expensive medical interventions.
A study conducted by Keehan and colleagues (2018) found that technological advancements accounted for approximately 42% of the growth in healthcare spending between 1996 and 2013. Therefore, the constant introduction of new medical technologies continues to exert upward pressure on healthcare costs.
2. Prescription Drug Costs
The cost of prescription drugs is another significant driver of increasing healthcare costs in the United States. The prices of many commonly used medications have risen dramatically in recent years, making them increasingly unaffordable for patients, especially those without adequate insurance coverage. Factors contributing to the higher drug prices include the monopoly power held by pharmaceutical companies, limited competition, and high research and development costs.
An analysis by Hartman and colleagues (2019) found that the prices of prescription drugs accounted for 17% of total healthcare expenditures in 2017. Moreover, the study revealed that prescription drug spending grew at a faster rate than other components of healthcare spending. This has prompted concerns and calls for strategies to reduce the cost of medications.
3. Administrative Costs and Fragmented System
The complex and fragmented nature of the United States’ healthcare system has also contributed to rising healthcare costs. The administrative costs associated with billing, claims processing, and obtaining reimbursement from multiple payers add significant financial burden to the healthcare system. A report by Woolhandler and Himmelstein (2016) estimated that administrative costs accounted for approximately 8% of total healthcare expenditures, or approximately $496 billion, in 2015.
The multiplicity of private and public insurers, each with their own payment systems and requirements, creates administrative inefficiencies that inflate costs. Simplifying and streamlining the payment and reimbursement process could potentially reduce administrative costs and contribute to larger healthcare savings.
4. Aging Population and Chronic Diseases
The aging population and the prevalence of chronic diseases have also been identified as drivers of healthcare cost growth. As the population ages, there is an increased demand for healthcare services. Older individuals are more likely to require long-term care, specialized treatments, and costly interventions. Furthermore, chronic diseases, such as diabetes and cardiovascular diseases, are prevalent among older adults and require ongoing care and management. The burden of managing chronic conditions accounts for a significant portion of healthcare spending.
According to the National Center for Chronic Disease Prevention and Health Promotion (2019), chronic diseases account for approximately 90% of healthcare spending in the United States. As the population continues to age and chronic disease rates rise, the cost of providing care and managing these conditions is expected to escalate further.
Conclusion
The rising healthcare costs in the United States are influenced by a multitude of factors. Technological advancements, prescription drug costs, administrative inefficiencies, and the aging population with chronic diseases are among the key drivers of escalating healthcare expenditures. Addressing these factors necessitates comprehensive policy approaches that promote cost-effective use of technology, regulate prescription drug pricing, streamline administrative processes, and implement preventive measures to reduce chronic disease burden. Future research and policy initiatives should aim to identify and implement effective strategies to mitigate the rising healthcare costs for the benefit of patients and the sustainability of the healthcare system.