The Largest Healthcare Cost Drivers
Healthcare is one of the few things that people purchase and never know the real cost of. If facility and plant employees paid for medical services and procedures just as they pay for other consumer goods—out of pocket—they’d be more likely to pay attention to quality, cost and value. Hence the rise of "consumerism" in healthcare.
The Actual Cost of Medical Procedures
Many consumers would be surprised to learn what medical procedures really cost. According to Reuters, here are some typical prices for healthcare procedures in the United States:
- Maternity, Regular Delivery: $9,142.18
- Maternity, C-Section: $13,668.52
- ER Visit: $716.29
- Colonoscopy: $1,086.19
- Cardiac Stress Test: $261.27
- Chest X-Ray: $92.10
- Mammogram: $240.07
- MRI: $1,127,98
- CT Scan: $1,039.83
It’s no secret that healthcare costs are rising. A number of factors contribute to these increasing costs—some of the biggest contributors are listed below.
Increasing Pharmaceutical Costs and Use
Healthcare costs are growing in part due to the increased use of prescription drugs, and an increase in the number of newer, more expensive drugs that are prescribed. Though prescription drug manufacturers have revolutionized modern medicine, these advances come at a cost.
As pharmaceutical companies develop new drugs to treat serious medical conditions, the market for those drugs expands accordingly. The trend in the pharmaceutical industry is to maximize profits by developing drugs to treat conditions for which there were previously no drug treatments. These new “lifestyle” drugs treat or control conditions like nail fungus, impotence, obesity or hair loss. Manufacturers then use direct-to-consumer advertisements that encourage customers to ask their doctors for prescriptions for these medications.
The increased use of lifestyle medications and direct-to-consumer advertising have raised serious questions about where America’s healthcare dollars are being spent and if consumers are getting the best value for their money.
New, Expensive Medical Technology
New medical devices, diagnostic tests and medical imaging tools are enabling doctors to delivercare that would’ve been impossible in years past. Medical technology, just like pharmaceuticals, has revolutionized medicine and improved the lives of many people—but those advances have also come with hefty price tags. As the number of older Americans increases, these new devices and treatments are being used even more.
The healthcare system is primarily geared toward providing acute care and curing diseases. However, many people need care for chronic conditions. Chronic conditions are the major cause of illness, disability and death in the United States, and they account for a significant portion of healthcare spending. According to the National Council on Aging (NCOA), nearly half of American adults suffer from at least one chronic condition, accounting for more than 75 percent of the nation’s total healthcare costs.
Healthcare costs and, consequently, employee health benefits costs have been increasing at a very high rate for nearly a decade. Unfortunately, cost increases are still outpacing the rate of inflation, making healthcare a growing cost burden for consumers.
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