That figure shows an average rate of inflation in the next ten years of about 5.8%. To put that into perspective, that figure surpasses the average expected GDP, or gross domestic product, that makes up our national economy in a year period.
Why are Americans spending more on healthcare? Some reasons are more concrete than others.
The Affordable Care Act
Why is legislation that is supposed to be “affordable” costing Americans more money in healthcare cost? There is a paradox between saving Americans money in accessing insurance and costing the insured to access healthcare. With insurance available and affordable to so many more citizens through Federal and State exchanges, more people will be motivated to utilize healthcare. On the other hand, to combat the over-use of services, providers have begun implementing cost sharing programs that require higher out of pocket expenses for patients.
An Aging Population
The baby-boomers are reaching the Golden Years. Unfortunately for many, this means increased doctor visits, more costly medications, and in some cases, hospital or nursing home stays. As the aging population transitions into Medicare coverage, the ACA provides for a decrease in the funds and coverage available to Medicare recipients. In turn, this creates higher out-of-pocket expenses for a larger number of people.
Following the “Great Recession” in 2008, the United States has seen slow but meaningful economic growth. While this is a substantial step forward for our national economy, it will almost inevitably followed by an increase in the cost of goods and services related to healthcare.
Increased Availability of Prescription Drugs
Medical advances in the recent years have given new hope to many patients waiting for a cure. New drugs that can help to treat diseases like Hepatitis C, multiple sclerosis and some cancers are now on the market to be prescribed. The down side: these new advancements are costly. These costs are reflected in the overall increase in healthcare costs that Americans are facing.
Demand of Service
Are the tests, procedures and multiple screenings needed to diagnose simple concerns necessary. In many cases, no. Trends have shown that doctors are routinely prompted by patients to perform more than is necessary. Cautious patients are one thing, but today’s internet-bound society seems to have an aptitude to self-diagnose (with help from WebMD). Overbearing patients cost healthcare providers and insurance companies time and money to perform tests that are demanded, even if they are unnecessary.
To cover themselves, doctors may sometimes opt to perform tests and procedures that they know are unnecessary, but may avoid being found guilty of malpractice later down the road. Litigation in a malpractice claim is costly in both finances and reputation, whether the healthcare provider is found to have been at fault or not. These costs are inevitably spread to patients.