Increasing Health Care Costs: What you have to know

North Americans pay more than 1.5 trillion dollars for medical care every year and costs related to all types of health care, such as prescription medicines, continue to skyrocket. While some of the reasons behind this booming bill are comprehensible, North Americans caught in a cash crunch might be surprised to discover a few of the lesser-known causes of high health care costs.

The phrase health care might invoke images of doctors, nurses and hospitals, but the reality is that the medical field is a business and a remorseless one at that. Individual practitioners, researchers and participants may have wonderful intentions and a true need to serve people, but the structure of the American health care system ensures profit is the number one issue of importance.

Here are some facts that might help explain the high costs of US health care:

Pharmaceutic research and development companies expend about $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 responsibilities 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 acquisition of new technology is responsible for more than 50 percent of new health care spending over the last 3 years.

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

For numerous United States Citizens who are not able to afford the health care they need, increasing costs symbolise an ever-increasing block to medical services and merchandise. The financial effect is also found on the greater national scale with about fifteen percent of gross domestic product going toward health care costs. That is equal to around a quarter of the annual federal budget.

Comparatively, Canada invests around ten percent of its Gross domestic product on its public health care program. Unlike the U.S., 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 citizens for even less while still having better longevity than Americans. This proves that the quality of health care does not rise proportionately with the amount of money spent to achieve it.

While many Canadians supplement their overall health care with extra insurance to the cost of medication and benefits 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 spiraling dramatically, making health care insurance out of reach for many Americans. Currently, more than 40 million Americans do not receive any variety of health care benefit.

For employers, offering health care insurance for employees is also becoming increasingly expensive, with increases dramatically outpacing inflation rates. Some years, the difference is four or six fold. Even if premiums were to stay static, providing health care insurance to employees 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.

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

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

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

Encourage preventative care such as smart lifestyle alternatives, correct nutrition and exercise.

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

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