It is helpful to analyse the variations of health-care spending across the United States as policy makers evaluate alternative methodologies to limit growing health-care expenses.
In 2004, the United States spent $1.9 trillion on health care, accounting for 16 percent of its GDP.
Today the US spends approximately $3.8 trillion.
This comes to roughly $6,280 for man, woman, and child on aggregate in 2004.
Today it spends $11,582 per person roughly an 80% increase in under 20 years.
Actual expenditure, on the other hand, is unevenly divided across people, various parts of the population, different ailments, and different payers.
Researchers from the University of Michigan examined data collected between 2001 and 2018 from the Medical Expenditure Panel Surveys for this study.
By examining the change in healthcare spending by market sector and population subgroup, the researchers sought to understand how exactly how the U.S. health care system works in relation to expenditure; they analyzed more than 30,000 individuals.
Once the study had concluded, there were four areas that caught the eyes of the researchers.
Four key details:
1. Between 2001 and 2018, the concentration of healthcare spending across high, medium, and low spenders remained stable.
The high-spending bracket, which accounts for half of all expenditures, varies between 4.2 and 4.8 percent.
2. In general, high spending was more prevalent among patients with private insurance rather than Medicare.
3. In their study period spanning 18 years, the researchers found that uninsured individuals accounted for the highest percentage of costs.
4. Contrary to most categories, prescription drug spending saw a sharp increase in concentration.
A decade ago, 50 percent of prescription drug spending in the U.S. was concentrated in a small group of 6 percent of the population, but by 2018, the same expenditures were concentrated in just 2.3 percent of the population.
Facts we can draw from the study.
The study’s primary author, Dr. Joseph Dieleman of the University of Washington’s Institute for Health Metrics and Evaluation, stated, “Part of the reason we spend more on health care each year is the nation’s expanding and ageing population.”
“However, health-related factors such as rising price, intensity, and usage are driving the majority of the expenditure increase.”
In the United States, five considerations lead to increasing healthcare costs:
(1) So many residents
(2) An aging population
(3) Modifications in disease severity or occurrence
(4) Enhances the frequency with which people use healthcare services
(5) Increases prices and the intensity with which services are provided.
The influence of these various factors on total increases in health-care spending as well as increases induced by individual health problems and types of care is measured in this study.
Personal health care expenditure is included in the research, which covers inpatient, outpatient, nursing facilities, emergency rooms, dental treatment, and prescription medicines.
It also covers funds from all sources, including commercial insurance, Obamacare, Medicaid, and personal expenditures.
“When all of the health problems were totalled up, rising demographic growth resulted in a 23 percent rise in health care spending,” Dr. Dieleman stated.
“As individuals become older, their expenditure increases by 12%, and increases in cost and service intensity, which refers to the magnitude and diversity of services, result in a 50% increase in funding.”
Most crucially, he added, expenditure increases vary substantially depending on people’s illnesses and the types of care they get, such as inpatient, outpatient, medicines, and others.
Outpatient treatment spending grew by a staggering 85 percent between 1996 and 2013, owing primarily to an increased usage of services.
Due to the price hikes and increased service intensity, inpatient care spending increased by 59 percent.
Dr. Jay Want, executive director of the Peterson Center on Healthcare, which financed the study, remarked, “These results give some insight into why the United States invests even more on healthcare coverage.”
“How treatment is charged and given to patients, rather than the population’s growth or age, drives rising health-care spending. According to the findings, additional efforts are needed to address the factors that influence pricing.”
So what exactly does this mean
As evidenced by the study the increasing costs across the board for the US healthcare system is becoming a seriously concerning issue.
An ever-increasing population along with the fact people are generally living longer is not an issue unique to the United States, but they are acting as a key example of how desperately healthcare as a whole must be looked at.
While this report may be shocking, it does still provide some help for families to plan their finances to live healthier lives and save money in the process.
Yet at the end of the day better planning around your finances can only take you so far, and as evidenced by the study this runaway train doesn’t appear to be slowing down anytime soon.
The US healthcare system is a truly gigantic beast to tackle and as much as changes have been brought to it throughout the years, Obamacare being the most recent example.
The split between what is the right decision for healthcare and what is the political decision for healthcare is starting to truly affect its population.
Of course, there are certain elements the US realistically cannot control, extreme advances in modern medicine is one of the core reasons people are living longer which in turn means the population is continuing to grow, due to the fact people are being born faster than they are dying.
The US cannot control all aspects of the US healthcare system, that is true and realistically this study is but one of hundreds that are shining a spotlight on the many gaps in the US healthcare system which truly need fixing.
How exactly can these be fixed?
The answer is sadly far too tricky to fit into one article, however innovation and looking into new technologies to help cut down on the extortionate costs that plague a huge amount of the healthcare systems would certainly be a start.
A start that is so desperately needed.
It is time for a change within the healthcare system before this runaway train truly goes off the rails.