Health_Care_Spending

Health Care Spending Carolyn L. Porter HCS 440 June 18, 2012 Steven Miracle Health Care Spending For many people who go to see their doctors periodically they already know and understand that health care cost has risen. Simply go to the pharmacist to get a prescription filled, and they will see firsthand just how expensive paying for medicines has also risen. Take a little time and walk through Walgreens and CVS and look at the medicines on the shelves and view the price increases just in the past year and your wallet will start screaming. The cost of health care is still constantly rising, and it doesn’t seem to be getting any better. People are paying more for health care than they are for food, even though it has gone up too. Many people who are faced with a serious illness are left monetarily in a serious situation, which sometimes leads to filing bankruptcy. There are serious problems with the health care system in America, and there seems to be no solutions. “The U.S. government spent more than $2.3 trillion on health care in 2008, more than three times the $714 billion spent in 1990, according to the Kaiser Family Foundation. In 2008, U.S. health care spending averaged $7,681 per person in 2008. At the same time, for consumers, premiums continue to rise sharply. Since 1999, they have increased 131 percent for employer-sponsored health coverage, according to Kaiser. Stories of families facing unaffordable premium hikes can be found across the country. "Health care costs are partly so high because they have been increasing rapidly," said Stuart Guterman, assistant vice president for the Commonwealth Fund's Program on Payment System Reform. "There's a long list of factors like technology and the organization of health care that doesn't promote efficient and effective care." Despite President Obama's bipartisan health care summit last month, both parties continue to bicker about what should be included in a health care bill with each side presenting its own argument on what specific health care costs should be contained. Some experts argue that although the health care bill, as proposed by Obama and congressional Democrats expands benefits, and seeks to implement insurance reforms that would inaugerate coverage to a wider scope of people, it does not address the core issues behind rising health care costs. Proponents of the legislation argue that it is a start and creates the foundation for sustainable changes in the long term” (Huma Khan, 2010, Page 1). Health care cost is rising because of some main factors and they are 1. Medical Technology 2. Administrative Cost 3. Disease and Aging 4. Medical Malpractice 5. Prescription Drugs “Medical technology has helped advanced the medical field by leaps and bounds, but it’s also increased health care spending. A report by the U.S. Centers for Disease Control and Prevention showed that the use of high-tech medical tests and surgeries escalated rapidly over the past decade” (Huma Khan, 2010, Page 1). “In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 % of health care expenditures in the United States and 16.7 % of health care expenditures in Canada. Canada’s national health insurance program had overhead of 1.3 % ; the overhead among Canada’s private insurers as higher than that in the United States (13.2 percent vs. 11.7 %). Providers administrative cost was far lower in Canada. Between 1969 and 1999, the share of the U.S. health care labor force accounted for by administrative workers grew from 18.2 % to 27.3 %. In Canada, it grew from 16.0 % in 1971 to 19.1 % in 1996. (Both nations’ figures exclude insurance- industry personnel.) The gap between United States and Canadian spending on health care administration has grown to $752 per capita. A large sum may be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system” (Steffie Woolhandler, MD, MPH, Terry Campbell, MHA, and David Himmelstein, MD). “There is no question that obesity has raised an alarming rate in the United States. One-third of all adults fell in the obese category in 2007-2008, according the Centers for Disease Control and Prevention. As the baby boomer generation retires, there is increasing pressure on the cost structure to treat ailments. Health care costs for chronic disease treatment account for 75 percent of national health expenditures, according to Kaiser” (Huma Khan, 2010, Page 1). “Rapidly rising medical malpractice premiums have become an issue of increasing concern for physicians, policy makers, and the general public. Premiums rose by an average of 15 percent between 2000 and 2002, according to the Congressional Budget Office, while physicians in certain medical specialties and geographic areas experienced far greater increases - for example, premiums for general surgeons in one Florida County rose by 75 percent, to nearly $175,000 per year. Some policy makers and interest groups have called for tort reform measures, such as caps on non-economic damages in malpractice suits, to limit the growth of premiums. The growth in malpractice premiums has the potential profoundly to affect the health care system. Premiums may influence physicians' decisions to join and leave the labor force, their choice of a medical specialty, and their decision of where to locate, creating the potential for underserved patient populations in certain specialties or geographic areas. Rising malpractice premiums may also encourage physicians to practice, "Defensive medicine," performing more tests and procedures than necessary in order to reduce exposure to lawsuits. Although with rising malpractice premiums, and defensive medicine practices may contribute to the increase in health insurance premiums” (Katherine Baicker and Amitabh Chandra, 2012, Page 1). Hospital care is accounted for 31% of national health expenditure in 2008, with physician, and clinical services trailing at 21%. Compared to that, the cost of prescription drugs is less--it only accounted for 10% of national spending--but the alarming sign is that it is one of the fastest growing spending programs. “Since Medicare Part D was implemented in 2006, government costs have shot up significantly, with funding for prescription drugs for Medicare beneficiaries shifting from the private to the public sector. It has also become a political hot-button issue. Republicans do not want to see any changes to the Medicare Part D plan, a federal program launched in 2006 to provide prescription drug benefits to Medicare beneficiaries. Democrats say they want to close the doughnut gap in the program. When Medicare beneficiaries on the plan reach a certain ceiling, they have to pay the difference for their prescriptions out of pocket. Obama's plan seeks to give Medicare beneficiaries a rebate of $250 to those who reach the coverage gap in 2010. Some critics of the current health care bills say that while it's true prescription drug coverage is rising, the government needs to tackle the size of hospital and physicians' bills first because those costs are higher” (Huma Khan, 2010, Page 4). So, as we look at several things that have contributed to the increased cost of health care we can see that things aren’t getting any better. America’s health care system is in serious trouble and needs a solution quickly. Whether our government can come up with a solution or not we may need to look at other countries and how their health plans are benefiting their people. The United States needs something done to better benefit the people of its country. References Baicker, K., & Chandra, A. (June 16, 2012). Do Medical Malpractice Costs Affect the Delivery Of Health Care' Retrieved from http://www.nber.org/aginghealth/fall04/ow10709.html Khan, H. (March 9, 2010). Why Health Care Cost keep Rising: What you need to Know. Retrieved from http://abcnews.go.com/Politics/HealthCare/health-care-costs-biggest-drivers/story Woolhander, M.D.,M.P.H., S., Campbell, M.H.A., T., & Himmelstein, M.D., D. U. (August 21, 2003). Costs of Health Care Administration in the United States and Canada. The New England Journal of Medicine, 349, 768 - 775. Retrieved from http://www.nejm.org/doi/full/10.1056/NEJMsa022033'view