Escalating costs are bleeding the healthcare industry

Curtailing the cost and consistently enhancing the quality of medical care are the major issues that the global healthcare has to deal with as of now. If history is any guide, cutting the health care costs requires the stakeholders to adopt a collaborative and inclusive approach. Unfortunately, there exists no quick fix formula to bring down the escalating health care costs. The stakeholders will be better served, if they recognize areas where common ground is a possibility.

If the findings of a 2013 survey conducted in 11 countries by The Commonwealth Fund is to be believed, the United States shells out about $8,508 per person on health care, which is three times more than Norway. It is worth mentioning that Norway ranks second among the list of highest spenders. The study further states that health care costs in the U.S. are estimated to rise at a healthy average of 4.4 percent a year from 2013-2017.

As of now, USA is spending nearly 18 percent of its total GDP on health care, while the recession riddled European countries are spending around 10 percent of their GDP. The increase in health care cost is fuelled by a variety of factors.

Consolidation in healthcare segment

Firstly, the healthcare industry, especially in the U.S., is going through a phase of reformation and consolidation. This has led to an increase of more than 50 percent in costs since 2009. According to a recent report made public by Deloitte, hospital mergers are increasing the healthcare costs by 20.3 percent. The price rise is more pronounced in markets with solitary health care system.

Prolonged hospital stays

The prolonged hospital stays are also responsible for rising costs, particularly in the affluent nations. The new biologics are steadily outpacing the conventional therapies and that pattern will continue for a long time. The rise of these expensive and complicated biologics can further add impetus to the health care expenses.

Overuse of medical services

Overuse of medical services is another plausible reason for escalating prices. Overuse, according to the study by Deloitte, contributes up to 30 percent of the entire U.S. health care spending. No prizes for guessing; high health care costs have severe implications not only on patients but service providers and insurers as well.

According to the Commonwealth Fund survey, about 23 percent of U.S. adults, either had a tough time paying medical bills or did not pay them at all. Moreover, 13 percent of adults in France faced the same dilemma. The report further states that about 40 percent of both, insured and uninsured individuals in the U.S. spent in excess of $1,000 on medical out-of-pocket costs in the last year. It is worth mentioning that insurance premiums are not included.

Rise in medical costs does not corresponds with rise in quality

The irony here is that the quality of healthcare services has not grown as consistently as the prices. A large number of patients, even in the developed parts of the world, consider the hospitals that treat them as a bigger threat than the ailments they are suffering. In fact, 1.7 million patients in the US develop infections while seeking treatment in the hospital.

These infections prove fatal to 99,000 patients annually. However, most of these infections are preventable. If the healthcare providers adhere to the basics of medical care like hygiene, the number of deaths can be restricted. The Deloitte study further reveals that the hospital-acquired infections take a toll of 30 billion USD from the government exchequer annually.

Apart from this, over-prescribing of drugs is also contributing to the woes of patients and governments alike. Over-dosage of medicines has made thousands of patients vulnerable to a variety of side effects, many of which are fatal. The U.S. Centers for Disease Control & Prevention in its latest report revealed that 14 million patients misused their medications.]]>

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