Quiz: Why is healthcare becoming more and more expensive?
Possible Answers (choose one):
a) Aging boomers are coming in droves and it costs a lot of money to help them.
b) Doctors order too many tests.
c) It’s because of the price of drugs, bureaucracy, doctors, and hospital stays.
The correct answer is c), according to a November 13 report at NPR.org, citing recent research reported in the American Medical Association journal, JAMA.
Doctors, drugs, hospital stays, and bureaucracy are the culprits for about 91 percent of the rise in healthcare spending since 2000.
Some of the researchers’ findings:
- The cost of healthcare has grown by more than 300 percent in the past 20 years (in real terms). It now accounts for about 18 percent of GDP in the U.S. That translates to $2.7 trillion.
- What’s more, people used to need to go to a hospital for real emergencies or major sudden illnesses (1980). Now, the NPR article reported, it’s the chronic diseases such as cancer and diabetes that are costing the nation so much: chronic diseases account for 84 percent of the nation’s healthcare costs. And, before we go about blaming aging boomers for the increase in chronic disease such as diabetes, researchers found that it’s people younger than 65 who account for about 75 percent of the costs associated with chronic illness care!
- In addition, the article continues, we’re not really getting a great ROI. Our increased life expectancy isn’t growing as fast as other developed nations and we’re doing a poorer job of treating many formidable illnesses and issues such as infectious and cardiovascular diseases (although we’re doing a pretty good job battling cancer).
- Government also has been paying a larger share of healthcare costs, while individuals have paid less since 1980. The federal government’s share has grown to 42 percent (from 31 percent in 1980). What’s more, individual out-of-pocket spending (on such things as copays and premiums) dropped in those 33 years to 11 percent (from 21 percent).
The NPR article says that the fact that doctors are now working either for large groups or even for hospitals instead of as solo practitioners could make the delivery of health care more safe and efficient (on the plus side), but – as a major negative – could become far less personal, what the article dubbed “doc-in-the-box clinics.”
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