Rise in US Healthcare Spending
The Centers for Medicare and Medicaid Services (CMS) are projecting that the healthcare industry spending in 2018 will increase. On average, the United States spent around $3.2 trillion on healthcare each year. Despite increases spending, the US still has a lower life expectancy and worse health than other countries. With regards to the spending increases, will the US fix the issues in our healthcare or will we just accrue more debt? Today, I will be taking a deeper dive into these questions and more.
Why the United States Spends So Much on Healthcare
Experts expect healthcare spending to increase by 5.3% in the 2018 year. With such poor health, people might wonder what exactly are we spending our money on. One of the reasons can be seen in the number. The US spends about $9,237 per person each year. This number is almost cut in half anywhere else in the world and our life expectancy isn’t even the highest – falling somewhere between 75-80. So why are we spending more money with no benefits? One reason that we pay so much for healthcare is the advanced and expensive technology we use. Increased use of medical technology contributes to around 50% of our annual cost.
Preventative care and defensive medicine, the practice of ordering multiple tests to make sure that doctors don’t miss anything, has become popular. This practice is used to avoid lawsuits for missing something during checkups. With things, such as the Affordable Care Act that covers the 10 essential benefits, patients have a wider range of options and the ability to get comprehensive coverage. Since everyone in an ACA plan is allowed the same benefits, which covers a broad spectrum, the price of providing these plans is high. The price to keep hospitals up and running can be high. For instance, a 200-bed hospital could cost over $160 million per year to keep it up and running. With such high prices, there is no way to lower cost.
Where Are the Solutions?
Many tech companies are entering the healthcare market that might help lower costs, but this is not enough. With cuts to healthcare cost in the drafts of this year’s budget, we can only hope for a solution. Stay tuned for this issue being addressed and any updates we hear! For now, check out this post from the hill, which goes into more detail about how we can possibly fix health care.