Summary For a family of four, the overall cost of healthcare expenditures in the United States comes to around $19,393.00. This rise may be only 7.3 percent higher than last year’s average cost of $18,074, which is the smallest year-over-year increase in almost a decade, according to milliman, a worldwide consulting and actuarial business. However, at $1,319, it is the largest increase in total dollars spent per household over the previous year.Strachan (2011). shown on the same website In 2002, American families had healthcare costs of $9,235, and those costs have now doubled in fewer than nine years, claims Lorraine Mayne, partner at Milliman and consultant actuary. Employer contributions accounted for 48.6% of the rise in healthcare expenditures, with employee contributions covering the majority of the remaining 51.6%. According to data from the U.S. Department of Labor and the Kaiser Family Foundation-Health Research and Educational Trust Annual Employer Survey, from 1999 to 2007, premiums for employment-based private insurance increased by 114%, while earnings increased by 27%, leaving an average gap of 7 percentage points per year. (p. 3 of Ginsburg, 2012). This makes up a larger and larger portion of the family budget. US consumers are estimated to have spent $363 billion on healthcare in 2009. The four primary factors driving up healthcare expenses are managed care, health insurance, productivity, and demography. demographics The present population’s demographics contribute to the United States’ rising healthcare expenses. Both the number of senior citizens and the average life expectancy in this nation are rising at the moment. The budget for Medicare is being severely strained by these hikes, and things will only get worse. An increasing amount of money is being taken out of the personal budgets of the typical elderly citizen in our nation who relies on Medicare to assist pay for their medical bills. Medicare recipients must shoulder a significant financial burden for medical and long-term care services due to gaps in coverage. The typical beneficiary’s out-of-pocket medical expenses in 2004 came to about 20 percent ($2,477). Ten percent of recipients made out-of-pocket payments of $5,000 or more in the same year. (Orszag, 2008). This will only grow worse since they will need more healthcare as they get older. Our country is seeing a rise in the number of jobless people in addition to an increase in the elderly. They will have long-term health problems that we, the tax payer, may have to pay for if their health is not maintained by routine medical treatment. health coverage In our nation, health insurance is still a hotly contested issue with huge variations. Different segments of the American population are covered by a variety of insurance plans. The first important distinction between them is insurance policies provided by private companies vs state programs. (p. 52, Kovner, 2011). The three main public insurance programs are children’s health insurance program (CHIP) for the poor, Medicaid, and Medicare for the elderly. Since the 1960s, public healthcare insurance has increased while private insurance has decreased. $1.2 trillion was spent on healthcare by the private sector in 2008. The high cost of health insurance coverage is still an issue. In 2011, the average yearly premium for family coverage was $15,073, while the average yearly premium for individual coverage was $5,429. (2011, Lyons). The consolidated omnibus budget reconciliation act, or COBRA, was created in 1985 to help people who lost their employment continue to have insurance for a maximum of 18 months. The disadvantage of cobra coverage is that the former employee is now unemployed and must pay the full cost of the premiums, which might be high. productivity On a national level, the United States’ healthcare system is not very productive. The way that care is delivered is the primary determinant of productivity in healthcare. The failure of medical treatment, according to Harvard economist David Cutler, who advised President Obama during the 2008 campaign, is not so much that errors are made but rather that the system has not developed mechanisms to limit those mistakes. Evans (2011). The annual waste resulting from this loss of productivity is estimated to be $700 billion. Poor quality information and publically sponsored insurers that pay for the quantity of treatment provided, regardless of quality and efficiency, seem to be the main causes of the problem. The customer is then charged for this expense. controlled medical services Managed care plans are health insurance policies that have agreements with hospitals and physicians to provide members lower-cost treatment. Point of service (pos), preferred provider organizations (ppo), and health maintenance organizations (hmo) are the three categories of managed care. Ppos are the same but will pay a percentage if you travel outside the network, and poss allow you pick between the two. Hmos forces you to choose between providers inside the network. The fact that managed care can influence expenditures for this population suggests that managed care activity can have broad effects on the entire health care market. This is the problem with hmos: there are increases in managed care activity that may have spillover effects, influencing the performance of the entire health care delivery system, thereby affecting care for both patients under managed care and those not. (Page 2 of Baker, 1997). To address these issues, we clearly require efficient administration at every stage of the healthcare system, from the patient to the government. In conclusion, the state of healthcare in our nation will only deteriorate further if these issues are not resolved. alludes to Medicare. Evans, M. (2011, June 1). Retrieved March 25, 2012. $700 billion is the cost of low productivity in the healthcare industry. taken from Ginsburg, P. (2012, October 8). March 25, 2012. the project of synthesis. obtained from kovner, a. (2011) on March 25, 2012. V. Weisfeld, ed., Health Care Delivery in the United States, 10th ed. Springer Publishing Company, LLC, New York. (2011, September 27) Lyons, K. The typical family health insurance plan now costs nine percent more. taken from Orszag, P. (2008, May 29) on March 25, 2012. Demographics vs health care costs: the future of Medicare. taken from Strachan, M. (2011, May 16). March 25, 2012. in the Huffington Post (ed.)
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