Recent Healthcare Reform

With the current hysteria surrounding health care reform, it is important to note that the cost of healthcare is where the underlying need for reform exists.  This significant issue for businesses, employees, and health insurers is continuing to grow.  In 2008 alone, national spending on health care reached $2.3 Trillion dollars.  There is not a single cause of the amazing growth in cost for health care, many factors come into play.

Treatment costs:

• 51% of the growth in health care spending is driven by medical price inflation.
• Doctors in the U.S. earn two to three times as much as other industrialized nations.
• Physicians a tending to become specialists, which can charge up to twice a much.
• Compensation for doctors in the ten year period between 1997 and 2006 has increased for some specialists as much as 97%.
• Medical technology improvements contribution to health care spending growth ranges between 38% to 65%

Prescription drug costs and utilization:

• Prescription drug prices, between 1997 and 2007, grew on average two-and-a-half times the rate of inflation.
• Specialty drugs are expensive; a new cancer drug can cost $100,000 or more per treatment cycle.
• Half of all adults in the U.S. take at least one drug a day.
• 7% of all adults in the U.S. take at least 5 drugs a day.
• Two thirds of people who go to a doctor’s office leave with a prescription.

Cost Shifting:

• Government programs, such as Medicaid, SCHIP, and Medicare, pay physicians and hospitals lower rates than private insurers.
• Providers adjust the prices charged to insurers to offset losses from partial or non-payers.
• Cost shifting represents 15% of the amount spent by commercial payers to hospitals and physicians.

Posted in News on June 9, 2010 by admin