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eLearning Series:
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Insurance
( 50 articles
in this series )
Rising Health
Care Costs: What's Up With That!
Americans pay more than one and a half trillion
dollars for medical care each year and costs related to all
manner of health care, such as prescription drugs, continue
to skyrocket. While some of reasons behind this booming bill
are understandable, Americans caught in a cash crunch might
be surprised to find out some of the lesser-known causes
of high health care costs.
The words ‘health care’ might invoke images of doctors, nurses
and hospitals, but the reality is that the medical field is
a business and a ruthless one at that. Individual practitioners,
researchers and participants may have wonderful intentions
and a true desire to help people, but the structure of the
American health care system ensures profit is the number one
issue of importance.
Here are some facts that may help explain the high costs of
American health care:
Pharmaceutical
research and development companies spend roughly $20 billion
each
year on R&D, and about the same amount
on advertising and self-promotional marketing activities.
Additionally, drug
companies have as many sales people as there are doctors in the United States. One of the responsibilities
of this sales force is to convince doctors to attend pharmaceutical
company-sponsored seminars where drugs are showcased.
According to some economists, the
purchase of new technology is responsible for more than 50 percent of new health care
spending over the last three years.
Much of the money Americans pay for health care finds its
way into the rising profits on health care-related products
and services such as the provision of medical insurance. Even
higher costs have been forecasted for the future, especially
for prescription drugs.
For many Americans who are unable to afford the health care
they need, rising costs represent an ever-increasing barrier
to medical services and products. The financial burden is also
felt on the larger national scale with about 15
percent of gross domestic product going toward health care costs. That
is equal to about one quarter of the annual federal budget.
Comparatively, Canada invests around 10 percent of its GDP
on its public health care program. Unlike the United States,
Canada’s health care program is universally available to all
citizens and permanent residents without cost. Other countries,
such as Germany, where there is a public/private delivery system
model for health care, manage to serve their populations for
even less while still having better longevity than Americans.
This proves that the quality of health care does not rise proportionally
with the amount of money spent to attain it.
While many Canadians supplement their universal health care
with added insurance to cover the cost of medication and perks
such as semi-private or private hospital rooms, health care
insurance is much more essential in the United States. Unfortunately,
costs have been rising dramatically, making health care insurance
out of reach for many Americans. Currently, more than forty
million Americans do not receive any kind of health care benefit. For employers, providing
health care insurance for employees is also becoming
more expensive, with increases dramatically
outpacing inflation rates. Some years, the difference is four
or six fold. Even if premiums were to remain static, offering
health care insurance to employees still costs several thousand
dollars per worker. For smaller companies, or for those who
employ a large number of people, these costs can be prohibitive.
Measures to reduce health care costs are always under consideration,
though many are not popular choices. Suggestions that have
been put forward by various sources have included:
- Increased drug awareness and education. Millions could be
saved if health care insurance covered only generic versions
of drugs that have been proven just as effective as their more
expensive brand name counterparts.
- Terminate expensive treatment options will only add a short
amount of time to a patient’s life, particularly if it will
not be quality time (i.e. patient is in a coma).
- Promote preventative care such as smart lifestyle choices,
proper nutrition and exercise.
- Examine to ways to control drug advertising to consumers.
There is speculation that advertising has led to prescriptions
of non-necessary drugs.
- Limit malpractice liability so doctors and medical professionals
do not feel pressured to cover themselves by ordering unnecessary
tests to substantiate conditions they already know to be present.
- HMO management reform
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SolveYourProblem.com : 2005
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