A steady increase in healthcare costs definitely presents one of the most discussed issues surrounding the U.S. care delivery system. Today, Americans spend enormous sums of money on healthcare, including high insurance fees, health deductibles, and other types of payments. The current situation was not always the case, and this essay discusses the key factors that have contributed to the continuous increase in care costs.
Given the enormous effects of government policies on the relationships between care providers and taxpayers, rising healthcare costs are linked with policy decisions that have polarized the U.S. society relatively recently. For instance, the U.S. President blames the so-called Obamacare and is willing to replace it, whereas many care providers are afraid of further problems following this decision (Goodnough, 2016; Liu & Brook, 2017). Opinions concerning the ACA’s contributions to rising care costs find reflection in modern research. There is scarce evidence that the ACA’s cost-containment strategies work as expected, and the law gets criticized due to limited charity guidelines (TNHFMA, 2015; Valdovinos, Le, & Hsia, 2015; Weiner, Marks, & Pauly, 2017). Cost containment is needed to strike the right balance between expenses and health outcomes (Shi, 2014). In the recent past, coverage expansions within the frame of Obamacare led to a predictable increase in care spending to produce a temporary deterioration of cost optimization results (Weiner et al., 2017). Therefore, in spite of temporary successes and effects on the number of uninsured people, government policies have partially contributed to increases in healthcare costs.
In addition to the globally-known policy decisions, rising healthcare costs are often associated with variables that are more difficult to control – the characteristics of the U.S. population. The first factor that has to deal with enormous increases in healthcare costs beginning in the mid-1990s is the size of the population. The U.S. population size significantly increased between 1996 and 2013 due to immigration and changes in natality rates, which contributed to care costs (Dieleman et al., 2017). This population growth is among the largest population-related factors explaining the increasing costs – it is responsible for a 23.1% increase in spending or $269 billion extra expenses (Dieleman et al., 2017, p. 1668). Most importantly, the changes in population size were positively associated with increases in inpatient expenditures (Dieleman et al., 2017). Taking these facts into account, population growth has contributed to today’s situation with care costs.
Other characteristics that have added to the present situation with healthcare expenses include the age structure of the U.S. population and factors associated with service use. In particular, close attention is to be paid to such trends as population greying and reductions in the number of working-age citizens. According to the JAMA study, population greying is the second most significant factor after population growth predicting increases in healthcare costs (Dieleman et al., 2017). Population aging has caused an 11% difference in healthcare costs if the period between 1996 and 2013 is taken into account (Dieleman et al., 2017, p. 1668). Aside from the characteristics of large population groups, healthcare costs have been significantly affected by the degree to which the prices of services are stable. The rising of healthcare service prices and service intensity is related to a 50% increase in healthcare costs (1996-2013) (Dieleman et al., 2017, p. 1671). In their turn, gradual changes in the prices of services are probably associated with numerous scientific and technological advancements that make treatment more effective and resource-consuming at the same time.
Other factors that have contributed to the continuing rise of healthcare costs include high drug prices and ineffective programs to reduce their impact on common Americans and the entire healthcare system. In particular, attention is to be paid to programs that are to provide financial assistance in purchasing expensive medications. Over the past few decades, pharmaceutical companies have implemented a range of new research and production methods, which resulted in price growth (Ubel & Bach, 2016). For instance, in the case of EpiPen, there was a six-time price increase, and copay assistance programs were proposed to protect public health (Ubel & Batch, 2016). Instead of striking the right balance between expenses and outcomes, such programs further support the rise of healthcare costs. They contribute to the problem by “reducing public outcry over outrageous drug prices” and shifting society’s attention from drug manufacturers’ behaviors to the seeming benefits of copay assistance (Ubel & Batch, 2016, p. 878). In other words, efforts to reduce particular patients’ drug expenses instead of eliminating the poorly-controlled growth of drug prices involve the threats of price inflation and corresponding effects on healthcare costs.
To sum it up, the topic of increases in healthcare costs receives much attention in the scientific community. Apart from some policy decisions’ limitations, such as the ACA’s approach to cost containment, modern authors regard demographic changes in the past, including population growth and greying, as contributors to today’s continuing rise of healthcare costs. The prices of healthcare services and medications, as well as poor control of pharmaceutical companies’ pricing strategies, also present the contributing factors.
References
Dieleman, J. L., Squires, E., Bui, A. L., Campbell, M., Chapin, A., Hamavid, H., … Murray, C. J. L. (2017). Factors associated with increases in US health care spending, 1996-2013. JAMA, 318(17), 1668-1678.
Goodnough, A. (2016). Safety-net hospitals fear cuts as health law’s repeal looms. The New York Times. Web.
Liu, J. L., & Brook, R. H. (2017). What is single-payer health care? A review of definitions and proposals in the U.S. Journal of General Internal Medicine, 32(7), 822-831.
Shi, L. (2014). Introduction to health policy. Chicago, IL: Health Administration Press.
TNHFMA. (2015).Solving the problem of uncompensated care[Video file]. Web.
Ubel, P. A., & Bach, P. B. (2016). Copay assistance for expensive drugs: A helping hand that raises costs. Annals of Internal Medicine, 165(12), 878-879.
Valdovinos, E., Le, S., & Hsia, R. Y. (2015). In California, not-for-profit hospitals spent more operating expenses on charity care than for-profit hospitals spent. Health Affairs, 34(8), 1296-1303.
Weiner, J., Marks, C., & Pauly, M. (2017). Effects of the ACA on health care cost containment. LDI Issue Brief, 24(4), 1-7.