Healthcare Spending
The reasons for the high cost of healthcare
There are a wide range of reasons for the high cost of healthcare in the U.S. some of the most common factors cited for the high cost include the increasing costs of medical technology as well as prescription drugs and increasing administrative costs caused by a highly complicated payer system. Recent research has indicated that an average of 22% of all dollars spent on healthcare go to costs related to administration. Other reasons that have been cited to have contributed to the raising cost of healthcare include the increase in the number of for-profit healthcare providers in relation to non –for profit healthcare providers. This includes the recent increase in the number of hospital chains operating as business units with the aim of making profit. Finally, there is a large number of people in the U.S. who are not insured and as such, their failure to seek treatment for conditions that could be inexpensive to treat in their initial stages complicates matters. These conditions later develop into complications which are much more expensive to treat (Ginsburg 2008). With millions of citizens’ uninsured in the U.S, it is obvious that everyone does not receive the same amount of care. The cost of accessing quality healthcare facilities is itself so high to lock most of the unemployed citizens out of quality and meaningful healthcare.
Historical and Projected trends in healthcare spending
Over the last few decades, healthcare spending has increased exponentially in the U.S. According to Getzen (2007), in 1960 we had a spending of about $27 billion and in 1993 this had increased to $888 billion. Within this period, the average increase in healthcare stood at about 11% per annum. Healthcare spending however slowed down from 1993 to 1999 standing at a rate of 5% per annum. In 2008, healthcare spending stood at about $2.3 trillion (Dean et al. 2009). Currently, health care spending is expected to hit $ 3.1 trillion by 2012 growing at an estimated rate of 7.3 % per annum.
References
Dean, H., Volski, I. & Shakir F. (2009). Howard Dean’s Prescription for Real Healthcare Reform: How We Can Achieve Affordable Medical Care for Every American and Make Our Jobs Safer. Chelsea Green Publishing
Ginsburg, P.B. (2008, October) High and rising health care costs: Demystifying U.S. health care spending. The Synthesis Project, Issue 16. Robert Wood Johnson Foundation; Princeton, NJ.
Getzen, T. E. (2007). Health economics and financing, 3rd Edition. John Wiley and Sons, Inc.
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