Healthcare Costs in the US: An Overlooked Factor in Salary Considerations 

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Healthcare Costs in the US: An Overlooked Factor in Salary Considerations 

Healthcare can be complicated and expensive, mostly for Americans. Rising healthcare costs in the US have become a significant concern for individuals and have also impacted the economy.  

Factors like rising cost of drugs and healthcare professionals and their salaries is making contribution to the rise of healthcare costs in the US. 

In the US, citizens are bound to pay almost four times the price of their necessary pharmaceutical drugs. Even the doctors and nurses charge more than the other countries, along with their professional salaries.  

Through this article, I will help you learn about the healthcare costs in the US, related fctirs and how it going to impact the economy in US.  

Contents

The Healthcare In The US 

The Healthcare in the US

There is no universal model US healthcare sector. Most countries generally prefer to offer healthcare benefits from the government.  

However, in the case of the US, the government does not have anything specific ready for the citizens in terms of benefits. Thus, US citizens rely on insurance plans. These plans help citizens avoid excessive payments for healthcare services.   

About half of the US adult citizens, state that it has become difficult for them to pay the huge bills and costs. Recent reports states one out of four adults think it is troublesome to pay for medical bills at least for one person in the family.  

The current healthcare scenario in the US is changing drastically, and I must say it is causing a negative impact on the economy. Almost one out of ten adults say that they cut their pills in half, or they decided to skip their medicine doses.  

The Factors That Are Driving Overall Spending Of Healthcare  

In this section, I will discuss certain factors that have been playing an immense role in the rise of healthcare costs in the US. 

The Aged Population  

The aged population is considered as one of the reasons behind the rise of healthcare costs in the US. As people start to age, they become more reliable on medicinal assistance and other healthcare services.  

This large, aged population demands good healthcare services, increasing the overall demand. This increase results in high-rate healthcare costs in the US.      

Increased Number Of Enrollments For Healthcare  

In the US, the senior people take advantage of the federal insurance program, Medicare. People who are 65 years old or above can opt for the insurance program.  

However, more people are becoming eligible for the programs due to the increase of aging population.  

Medicare also expands causing a growth in beneficiary numbers. As a result, it is causing a huge increase in healthcare costs in the US. 

People’s Lifestyle And Their Behavior   

Human behavior also plays an active role in healthcare costs in the US. Smoking, Drinking, taking substances and poor diet can lead to a bad health. 

The healthcare service is witnessing an increased number of patients due to such poor lifestyles. Addressing these factors can be challenging and requires huge costs in healthcare services.  

Advancement In Medical Innovation 

In the new world of technological innovation, advancements in healthcare services are also making major improvements to provide better healthcare services.  

However, these medical innovations and advanced systems are high in cost. So, it can be said that technological advancement is making a huge contribution to the rise of healthcare costs in the US   

Economic Factors 

The state of the economy of the United States is highly responsible for the rise in the overall cost of healthcare services.  

When the economy takes a downturn, some people may delay seeking care due to poor financial resources.  

However, when there is economic growth, industry sees a massive increase in utilization and spending. Thus, it ultimately causes a rise in healthcare services costs.    

The Reasons Behind Increasing Healthcare Prices 

The Reasons Behind Increasing Healthcare Prices 

Price is considered a significant driver of the overall spending on healthcare services in the US. The overall cost of healthcare services increases faster than the other costs in the US economy.  

As the rising cost of healthcare has become a major concern in the present scenario, let’s dive into the reasons behind the rise in cost.  

New Healthcare Technologies  

Adopting new technologies can be useful for better and more effective results from healthcare services. New innovations add more features to the advancement of the medical service.  

However, these Medicare technologies often come with high costs. In many cases, cutting-edge devices, various diagnostic tools, and treatments raise healthcare costs in the US 

Healthcare Consolidation  

The consolidation of healthcare often reduces competition, but on the contrary, it increases the overall price of healthcare services. However, benefits and quality care could be more extensive.  

From 1998 to 2017, over 1600 hospitals merged, causing a price increase of more than 20%. The consolidation between hospitals allows the Medicare bodies to negotiate the price.  

It is unfortunate that the consolidation prices reduce the overall competition and lead to high prices in healthcare.  

Other than that, the healthcare bodies also tend to negotiate under anticompetitive contracts. This kind of contract often prevents the issuers from lowering their costs, reducing the chances for competition.  

Administrative Waste In The Healthcare System 

The US government invests more in healthcare administration than any other country. However, most of these investments are in vain or wasteful.  

For example, the government spends money on billing and coding. These systems are complex in nature, making a contribution to the high cost. 

Similarly, physicians and other Medicare providers require a good amount of time for administrative tasks. They are involved in dealing with patient records, coordinating all the patients, and even doing all insurance-related paperwork.  

These kinds of activities divert them from patient care and add more burden on the administration.      

How do the rising healthcare costs in the US impact on healthcare? 

The impact of healthcare costs on the US population is significant. In this section, I will explain the rise in costs and their effect on healthcare costs in the US  

National Debt 

The high rate of healthcare services often leads to an increase in national debt.  

So, it becomes a challenge for policymakers to balance the quality of healthcare services and fiscal responsibilities. 

Outcomes On Health 

Even though there is a high expenditure on healthcare services in the US, the country still lags behind when it comes to health outcomes.  

The high rate of healthcare services restricts people from underdoing medical assistance. As a result, it has become difficult for the country to avoid death, infant mortality, maternal issues, and suicide rates.  

It is crucial for the government to take certain actions against the challenges.   

Increased Number Of Chronic Condition 

The Americans are not ready to pay a fortune for medical treatments. They avoid seeing doctors or taking pills for a better cure. The US is currently having a high rate of people with chronic conditions.  

This is further creating issues for both individuals and overall healthcare as well.  

Obesity Epidemic    

Obesity Epidemic has become a new normal among the US population. The increased rate of patients suffering from obesity is leading to an increase in healthcare utilization.  

As a result, it significantly increases the overall cost of the treatments.  

Physical Access       

In the US, citizens do not often see physicians for treatments. Unlike other countries, US citizens avoid seeing a doctor or buying pills to continue their treatments. This is why the US has a lower rate of beds and physicians per population.  

Is there any solution to it? 

The price increase is no longer limited to low-income families. It also raises questions about whether high-income families can afford healthcare services at an increased price.  

Certain ways can be followed to manage the price rise and help the population with better healthcare services:  

  • Evidence-based practices and reducing unnecessary procedures can help deliver the best treatment to the population.  
  • It is important to promote innovation and promote competition among manufacturers and providers. 
  • The industry can practice price-limiting strategies such as capping prices to make the services affordable.  
  • They should also enhance the overall transparency about costs and prices.  
  • The administration can also look for cost-sharing arrangements for healthcare and prices.  
  • The healthcare industry needs to prioritize the policies that can be beneficial for the population.   

In Summary   

The rise in healthcare costs in the US is causing a huge issue for the population and the economy. Even in 2022, the healthcare spending in the US has increased by 4.1%. This is a massive growth compared to before the pandemic era. 

The high salaries of nurses and physicians, less competition between the manufacturers and service providers, and administration are prime causes of the price of US healthcare.  

Thus, it has become crucial for policymakers to enhance the quality of products, manage the federal budget, and enhance pricing transparency.   

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