Rising Health Care Costs: What you need to know

US Citizens pay more than one and a half trillion dollars for medical care every year and costs related to all types of health care, such as prescription drugs, continue to accelerate. While some of the reasons behind this booming bill are understandable, North Americans caught in a cash crunch might be amazed to find out some of the lesser-known causes of high health care costs.

The phrase health care might conjure up images of doctors, nurses and hospitals, but the reality is that the medical field is a business and a pitiless one at that. Individual practitioners, researchers and participants may have wonderful intentions and a genuine desire to help people, but the structure of the US health care system ensures profit is the first issue of importance.

Here are some facts that might assist in explaining the high costs of American health care:

Pharmaceutical research and development companies expend roughly $20 billion each year on R&D, and around the same amount on advertising and self-promotional merchandising activities.

Also, drug companies have as many sales people as there are doctors in the United States. One of the duties of these sales teams is to convince doctors to go to their company-sponsored seminars where drugs are showcased.

According to some economic experts, the purchase of new technology is responsible for more than 50 percent of new health care spending over the previous three years.

A great deal of the money United States Citizens pay for health care finds its way into the rising profits on health care-related merchandise and services such as the supply of medical insurance. Even greater costs have been envisaged for the future, particularly for prescription drugs.

For many United States Citizens who are not able to afford the health care they require, increasing costs represent an ever-increasing block to medical services and merchandise. The financial effect is also experienced on the larger national scale with about fifteen percent of gross domestic product going toward health care costs. That is equal to approximately a quarter of the yearly federal budget.

Relatively, Canada invests around 10 percent of its GDP on its public health care program. Unlike the USA, Canadas health care program is universally available to all citizens and permanent residents without cost. Other countries, such as Germany, where there is a public/private delivery system model for health care, manage to serve their populations for even less whilst still having better longevity than Americans. This proves that the quality of health care does not increase proportionally with the amount of money spent to achieve it.

While many Canadians supplement their universal health care with extra insurance to the cost of medication and perks such as semi-private or private hospital rooms, health care insurance is much more of a necessity in the United States. Unfortunately, costs have been rising dramatically, making health care insurance unreachable for many Americans. Presently, more than forty million Americans do not receive any variety of health care benefit.

For employers, providing health care insurance for their workforce is also becoming more expensive, with increases dramatically outpacing inflation rates. Some years, the difference is four or six fold. Even if premiums were to remain static, offering health care insurance to their workforce still costs several thousand dollars per worker. For smaller companies, or for those that employ a large number of people, these costs can be prohibitive.

Steps to shrink health care costs are always under consideration, though many are not popular options. Suggestions that have been put forward by various sources have included:

Increased drug awareness and education. Millions could be saved if health care insurance covered only generic versions of drugs that have been found to be just as effective as their more expensive brand name counterparts.

End expensive treatment alternatives will only add a small amount of time to a patients life, particularly if it will not be quality time (i.e. patient is in a coma).

Promote preventative care such as smart lifestyle choices, proper nutrition and exercise.

Analyze ways to control drug advertising to consumers. There is speculation that advertising has led to prescriptions of non-necessary drugs.

Limit malpractice liability so doctors and medical professionals do not feel coerced to cover themselves by ordering unneeded diagnostics to substantiate conditions they already know to be present.