Health Care Cost Since 2014, health care spending have increased from 5.3 percent, $3.0 trillion, or $9,523 per person (CMS, 2014) to 5.5 percent in 2015, $3.1 trillion, or $9,695 per person (Luhby, 2015). The consistent increase on health care spending is expected to rise through the year 2024. In fact, between 2014 and 2024, health care spending is expected to increase to 5.8 percent, which is the highest percent of health spending in three decades (Luhby, 2015). By 2014, more than 19.1 million people are expected to be enrolled in Medicare as a result of the aging population. Other reasons for the continued increase of health expenditures can be attributed to complex factors to include general inflation, third party payment system and multi-payer system and administrative costs, and growth of technology and consumer demand. By 2024, health care spending is expected to account for about 20 percent of U.S. spending (Luhby, 2015).
General Inflation / Gross Domestic Product (GDP) The gross domestic product (GDP) and general inflation in the economy have a significant impact on the increasing cost of health care in the United States. General inflation can have an adverse impact on the costs of producing health services by impacting wages and the cost of supplies and product health products. Ultimately, when health care spending exceeds that of the Gross Domestic Product (GDP), it results in the majority of economic resources being allocated to the delivery of health services and minimum investment in other goods in the economy. When there is a significant difference gap in health spending and overall economic growth, companies that offer health insurance trend to cut wages, reduce health benefits, and increase deductible so that employees pay more out-of-pocket cost or higher health insurance premiums. In theory, if the United States is able to keep the gross domestic product and inflation rate low, there may be a possibility of containing health care expenditures. Third-party Payer Method / Multipayer System & Admin Costs Third-party payer system, multi-payer, and administrative cost contribute to the rising cost of health spending in the United States. Third-party pay method dictates that a third party pays the majority of health services for consumers. Third-party payers include government and private insurance companies that pay the bulk of health insurance cost while consumers pay a fraction of the cost. Third-party payer methods do not provide an incentive for providers to contain health cost and leads to excessive utilization of health services. Finally, the mult-ipayer system includes administrative costs to include the cost of management, financing, payments functions, insurance, …show more content…
Health information technology is expensive, but we have laws that mandate the implementation of the technology. Products such as Electronic Health Records, Computerized Provider Order Entry, DaVinci Robotic Systems, and many more have not only increased the cost of health services in the United States, but have also increased the demand for advanced procedures. Yes, consumers have witnessed the benefits of technology in health care and now demand such technology on day-to-day basis. The introduction of new technology only raises the demand and also provides hope of cost containment and prolonged life. At this point, advancements of technology cannot be reversed. Technology has proved to increase access to health services, improve health quality, reduce hospital stays, and has contributed to the reduction of medical
General Inflation / Gross Domestic Product (GDP) The gross domestic product (GDP) and general inflation in the economy have a significant impact on the increasing cost of health care in the United States. General inflation can have an adverse impact on the costs of producing health services by impacting wages and the cost of supplies and product health products. Ultimately, when health care spending exceeds that of the Gross Domestic Product (GDP), it results in the majority of economic resources being allocated to the delivery of health services and minimum investment in other goods in the economy. When there is a significant difference gap in health spending and overall economic growth, companies that offer health insurance trend to cut wages, reduce health benefits, and increase deductible so that employees pay more out-of-pocket cost or higher health insurance premiums. In theory, if the United States is able to keep the gross domestic product and inflation rate low, there may be a possibility of containing health care expenditures. Third-party Payer Method / Multipayer System & Admin Costs Third-party payer system, multi-payer, and administrative cost contribute to the rising cost of health spending in the United States. Third-party pay method dictates that a third party pays the majority of health services for consumers. Third-party payers include government and private insurance companies that pay the bulk of health insurance cost while consumers pay a fraction of the cost. Third-party payer methods do not provide an incentive for providers to contain health cost and leads to excessive utilization of health services. Finally, the mult-ipayer system includes administrative costs to include the cost of management, financing, payments functions, insurance, …show more content…
Health information technology is expensive, but we have laws that mandate the implementation of the technology. Products such as Electronic Health Records, Computerized Provider Order Entry, DaVinci Robotic Systems, and many more have not only increased the cost of health services in the United States, but have also increased the demand for advanced procedures. Yes, consumers have witnessed the benefits of technology in health care and now demand such technology on day-to-day basis. The introduction of new technology only raises the demand and also provides hope of cost containment and prolonged life. At this point, advancements of technology cannot be reversed. Technology has proved to increase access to health services, improve health quality, reduce hospital stays, and has contributed to the reduction of medical