It’s no secret that healthcare in the U.S. is expensive, and prices are continuing to rise. Even with insurance coverage, out-of-pocket expenses can be a challenge for most Americans to handle, especially those with modest incomes. The reasons for these increases are complex, but looking at a few key areas can provide some insight.
Administrative Expenses
Between Americans and their healthcare, there are multiple layers of administrative expenses. Doctor’s offices and hospitals must pay for the personnel and technology necessary for scheduling, charting, billing, and recordkeeping. Insurance companies have similar administrative needs and costs.
According to Econofact, these administrative costs contribute to about 15 to 30 percent of overall healthcare spending. The costs are passed down to the consumer in the form of higher medical care bills and frequent increases in insurance premiums. You are not just paying your doctor; you’re paying a part of the costs associated with serving your health needs.
Prescription Drugs
According to Xevant, prescription drug prices in the U.S. are 256 times higher than the next 32 countries combined. Although most people have prescription drug insurance, co-pays are also rising. This is particularly worrisome for the elderly and people with chronic illnesses. Copays and out-of-pocket expenses can total hundreds of dollars per month.
The reasons for high drug prices are many, ranging from the pharmaceutical company’s costs for research and development to government policies related to drug regulations. Experts are continuing to study to find ways to make prescription drugs more affordable for those that need them the most.
Increasing Health Problems
Unhealthy lifestyles and poor health decisions are also contributing to rising costs. Obesity, smoking, substance use, and a sedentary lifestyle are all associated with chronic conditions such as diabetes, heart disease, and cancer. Management of these diseases is putting pressure on healthcare providers and leading to cost increases across the board.
To combat these problems and the associated expenses, many insurance companies, employers, and medical providers are offering programs and incentives to encourage healthier lifestyles. Preventative screenings, vaccinations, and patient education are all now largely covered by insurance.
Healthcare costs in the U.S. are higher than elsewhere, and the causes are difficult to understand, even for those who study the issue. There are multiple stakeholders that impact the costs and are, in turn, impacted by them. But everyone involved agrees that quality, accessible healthcare should be a priority for everyone.
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