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The paper "The Cost of Staying Well" discusses that the American taxpayer will have to pay more in taxes for the entitlement programs. Those that are not entitled will not be spared either, as they will have to spend large percentages of their income on the resultant high medical bills in hospitals…
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Why is the cost of staying well high? Introduction The rising cost of healthcare has undoubtedly pushed the cost of staying well through the stratosphere. The general expenditure for healthcare is likely to a whopping $2.8 trillion. Furthermore, entitlement programs are taking their toll on the federal budget. By the same token, major healthcare programs will constitute 32% of the domestic spending by the year 2022. This trend, if not checked, will have tremendous implications for the average American taxpayer, who will have to pay more in taxes and spend much more on healthcare.
This paper will discuss the various factors that have contributed to the rising cost of staying well.
Why are health bills so high?
The federal government is spending more than half its budget on entitlement programs, with major health care plans taking the lion’s share. Evidence is clear in the sense that when a statistical survey was conducted by the bipartisan policy Center, it revealed that in 1992, 14% of the Federal budget was for major health care programs. In 2012, it rose to 22% and the Center projected a 32% budget on all domestic spending by 2022.
Moreover, the US healthcare system is the most expensive compared to other high-income countries. It is 150% more than it is in the UK while it is double that of Canada. Furthermore, 18% of the gross domestic product goes to healthcare in the US, compared to 12% in France (Zuckerman, n.p.). However, this does not convert into better quality of life for Americans. Few Americans can live beyond the age of 70 while the country’s child mortality rate is higher than that of many other countries. Therefore, although the healthcare bill in enormous in the US, it has not improved the quality of life of Americans.
However, advancement in technology has not lowered the cost of medication in the US. Advancement in technology ought to reduce the cost of spending; however, this is not in the case in medicine. This is not to say technology in health sector is any less important. In fact it is, only that the cost of utilizing the machine or service for a medical purpose is far much expensive to the needy. Emergency room visit, for instance, can exceed the cost of an automobile. Moreover, the amount of dollars that would be spent on the dosage of upcoming new drugs will be unbearable.
To begin with, America’s hospitals have contributed to the ever-increasing cost of healthcare. Their rates in a way favor the insured wealthy but disfavor the uninsured. The insured patient can get a discount ranging from 30 to 50 percent beyond low medical rates (Brill, n.p.). This is necessitated by the fact that the insurance companies have a way of negotiating with hospitals. The uninsured, who are the majority however, have to meet the full cost of the hospital bill. This is what causes the escalated profits of the nonprofit hospitals. Bill was able to show that the average operating cost of 3,000 non profit hospitals which are exempted from income tax is more that that of a thousand profit hospitals put together. In response, the non profit hospitals argue that the rich people from overseas pay the bills and their pay cover for the uninsured as well.
Next, there are the drivers of cost. The costs of the hi-tech tests conducted in the emergency rooms are too high for the average American taxpayer. The uses of CT scanners, for instance, have increased recently. The hospitals have one more way of charging the customers in excess. They send them to in-house laboratories for unnecessary checkups to increase the costs.
The other way in which the cost of staying well has risen is a result of medical malpractice in which case a doctor is tempted to over-test for fear of being accused in medical malpractice. The providers therefore pay settlements to escape being sued. It therefore becomes difficult to sue the providers and even if one would, they would claim in defense that they have a point to argue basing their argument that their care was reasonable based on what was known.
Medicare spends a large sum on patients not fully healed in hospitals or those who are harmed. Readmission alone may cost as much as $25 billion in one year. On the other hand, the Medicare patients are readmitted to hospitals within thirty days of discharge. If you input the prescription drug prices to already escalating cost, it will rise even further. As Zuckerman noted from Brill’s analysis:
Research by McKinsey & Company estimates that "overall prescription drug prices in the U.S. are 50 percent higher for comparable products than in other developed countries." If we had the same prices, its estimated we could save close to $100 billion a year. Amazingly, the law "restricts the biggest single buyer – Medicare – from even trying to negotiate drug prices." (Zuckerman, n.p.)
Another contribution to the rising cost is Obamacare. As much as it will force insurance companies to be more elaborate in outlining their policies and restricting the use of hospital bill collecting, it is not of much help. This is not to say in any way that Obamacare is not significant. The point is, Obamacare will benefit the few million more Americans who will be lucky to get insurance protection. However, the benefit does not alter the healthcare prices or even alter the health care cost curve.
The cost of staying well has always been estimated. When Medicare was signed into law by President Lyndon Johnson in 1965, he estimated it would cost $12 billion. The actual cost was $110 billion. Reformers and human rights activists have consistently made attempts to alter the manner in which doctors and hospitals are paid, with the proposition that they be rewarded for their quality and efficient work (Zuckerman, n.p.).
However, in spite of the increased cost of healthcare, the average American taxpayer finds no solace in the system. First, there is no considerable effort to improve the quality of healthcare, even with the increased rates. Secondly, healthcare providers receive a fixed price for every service given, creating a loophole that can be exploited. Malicious providers may lodge claims for non-existent services. Therefore, as the healthcare costs increase, the average American taxpayer has no consolation whatsoever.
Value based system would change the payment system would change if value based system was to be employed. Zuckerman argues that "to remove the incentive for redundant and inappropriate care, now estimated to account for as much as a quarter of the nations $2.8 trillion in annual health spending, according to the Institute of Medicine." (Zuckerman, n.p.). The main idea is to move away from a supply driven system to a patient-centered system, thus maximizing values for patients. In reality hospitals have declined the use of value-based approach that will pay them less to deliver better care. The effect is continuous rise in the cost of staying well.
Conclusion
That the cost of staying well has soared is beyond question. Evidence abounds in the increased healthcare budget by the Federal Government. However, it is the average American taxpayer that will bear the brunt of this runaway increase. In order to sustain the increased budget, the American taxpayer will have to pay more in taxes for the entitlement programs. Those that are not entitled will not be spared either, as they will have to spend large percentages of their income on the resultant high medical bills in hospitals.
Several factors have contributed to the rising cost of staying well in the US. They include the extraordinarily high rates charged by hospitals and the high cost of hi-tech tests conducted by physicians and the equipment used. Another contributing factor is Obamacare, alongside readmission of harmed patients as well as those who are not fully recovered from treatment. Another cause is the approach used in determining the pay for hospitals and what the patients need to pay. The average American taxpayer, with their limited income, will be affected the most.
Work cited.
Zuckerman, Mortimer B. The High Cost Of Staying Well The U.S. Gets Poor Bang For Its Medical Buck.. US News 2013 : 1,2. Web. 30 Apr. 2014.
Brill, Steven. "Bitter Pill." Time 181.8 (2013): 16-55. Academic Search Complete. Web. 13 Aug. 2013.
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