Spiraling Health Care Costs: What you need to know

Americans pay more than one and a half trillion dollars for medical care each year and costs associated with all manner of health care, such as prescription drugs, continue to rocket. While a few of the reasons behind this booming bill are comprehensible, United States Citizens caught in a cash crunch may be amazed to find out some of the lesser-known reasons for high health care costs.

The phrase health care may 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 fantastic intentions and a genuine desire to aid people, but the structure of the US health care system guarantees profit is the number one issue of importance.

Here are some facts that may help explain the high costs of U.S. health care:

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

Also, drug companies have as many sales persons as there are doctors in the U.S.. One of the responsibilities of this sales force is to convince doctors to go to their company-sponsored seminars where medicines are showcased.

According to some economists, the acquisition of up to date technology is responsible for more than 50 percent of new health care spending over the previous three years.

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

For numerous North Americans who are not able to afford the health care they require, rising prices represent an ever-increasing block to medical services and merchandise. The financial effect is also experienced on the greater national scale with about 15 percent of gross domestic product going towards health care costs. That is equal to approximately a quarter of the yearly federal budget.

Relatively, Canada invests about 10 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 North Americans. This proves that the caliber of health care does not rise proportionally with the amount of money spent to attain 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 essential in the United States. Unfortunately, costs have been spiraling dramatically, making health care insurance inaccessible for many Americans. Currently, more than 40 million Americans do not receive any variety of health care benefit.

For employers, providing health care insurance for their workforce 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 remain static, providing health care insurance to their workforce still costs several thousand dollars per worker. For smaller companies, or for the ones that employ a large number of people, these costs can be prohibitive.

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

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

Terminate expensive treatment choices 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).

Encourage 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.

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