Healthcare remains an imperative facet of society that should be accessible at any given time affordably. Nevertheless, one major issue facing the US and many nations globally is the rising expense of healthcare, which limits accessibility and better health outcomes. The increasing cost of healthcare results in the restriction on healthcare access and rationing of healthcare services, which limit patients’ better health outcomes and productivity. Despite the challenging aspect of rising healthcare costs, exploring the history of increasing costs, current actions surrounding it, and taking a position on what should be done to address it forms the basis of navigating this challenging menace of healthcare rising costs.
The History of Rising Costs of Healthcare
The rising costs of healthcare date back to the 20th century, which recorded a significant increase in healthcare prices; between 1971 and 1981, the US healthcare spending increased exponentially, from $83 billion to $287 billion (Freeland & Schendler, 1983). Spending in the health sector increased at a rate that significantly surpassed economic growth overall, averaging 13.2 percent annually versus 10.5 percent for the GDP (Freeland & Schendler, 1983). According to Freeland and Schendler (1983), the healthcare expenditure increased to 12 percent of GNP in 1990, reaching approximately $756 billion, pressing the US economy further.
In addition, 1980s experienced a prime significant increase in healthcare expenditure, influenced by many factors. Factors such as the population’s age, new medical advancements, heightened competition, and constrained public financing significantly influenced the rising healthcare costs (Freeland & Schendler, 1983). Also, real income growth, a rise in the health workforce, and a slowdown in inflation were other main drivers of health spending increases in the 1980s (Freeland & Schendler, 1983). It is also noteworthy that the 1980s saw the emergence of new strains of diseases, such as HIV, which necessitated an increase in healthcare costs, which continued to increase as in the 2Ist century, amid new strain of diseases and emergence of chronic illnesses.
The US has struggled with the issue of rising healthcare expenses for many years. Healthcare reports indicate spending has continuously surpassed economic growth over the past decades. Healthcare expenditure in the United States increased by 4.1% to $4.5 trillion in 2022, above the 3.2% growth in 2021 but falling short of the 10.6% increase in 2020 brought on by COVID-19 (Centers for Medicare & Medicaid Services (CMS.gov.), 2023). The fee-for-service payment model has also increased costs by encouraging healthcare practitioners to give more treatments rather than concentrating on patient outcomes (CMS.gov, 2023). Fee-for-service (FFS) arrangements result in higher healthcare costs since the insurance company must cover the whole cost of the services rendered, regardless of how much the healthcare provider charges.
The Current Actions on the Rising Costs of Healthcare
The rising healthcare costs remain a pressing issue that should be addressed conclusively. The burden of healthcare falls heavily on people living below the poverty line, who are disproportionately affected by these payments. Positively, there have been concerted efforts to address the rising healthcare costs, albeit with varying degrees of success. Different administrations have sponsored different policies to ease the burden, with Medicaid, Medicare and the Affordable Care Act (ACA) of 2010 aiming to expand access to healthcare coverage. According to Neiman et al. (2021), the implementation of ACA has achieved tangible results in shaping the current US healthcare system. As the Act marked its 10 years in March 2020, hospitals with higher quality standards spend less on surgery, which was not the case in the past.
Additionally, the healthcare system saved $200 million due to bundled payments for bariatric surgery, which had the lowest readmission and complication rates among institutions with lower spending. Overall readmission rates dropped as a result of the Hospital Readmission Reduction Program, although the effects and extent of the reduction are still being assessed (Neiman et al., 2021). The ACA has remained evolutional in the US healthcare system, with statistics indicating that the disparity in insurance coverage by race and ethnicity has been on the decline since its inception. The percentage of non-Hispanic Black and Hispanic individuals without health insurance declined in states that did not expand Medicaid as well as those that did (Neiman et al., 2021). In states that saw growth, the coverage rates of Black people were comparable to those of white adults, ensuring quality care for all.
Further, the Biden administration has remained steadfast in the quest to lower healthcare costs, building on previous administration policies. It is noteworthy that Trump advocated for lower prescription drug prices, expanded access to affordable coverage, delivered hospital and insurer price transparency, and allowed Americans to access trusted doctors (The White House, 2024). Building on the predecessors’ efforts, the current administration has vowed to reduce healthcare costs; currently, seniors are already benefiting from decreased prescription medication expenses with other health-promoting programs, such as free vaccinations (The White House, 2024). The Biden-Harris administration has also directed a $35 cap on insulin and a $2,000 cap on out-of-pocket prescription drug expenditures beginning in 2025 to foster healthcare affordability. Initiatives supporting alternative payment structures and value-based care have also gained popularity recently (The White House, 2024). These strategies encourage healthcare practitioners to offer practical, high-quality treatment, which saves costs.
Policy Position in regards to Rising Costs of Healthcare
In addressing the issue of rising healthcare costs, I advocate for a collaborative approach that combines elements of primary care disease prevention and funding research to counter the impacts of this menace promptly. It is evident that healthcare costs remain a pressing challenge for the state and individuals despite the efforts to minimize expenses. In line with the pressing need to minimize costs, an optimal and effective strategy to address healthcare budget and expense restrictions is to place a higher emphasis on illness prevention and health maintenance instead of treatment. As Fazal et al. (2022) explain, investing in healthcare prevention is sustainable in the long run; it will minimize the increasing healthcare costs through detecting diseases in advance and planning adequately.
Besides, emphasis on primary health care is a more economical means of providing medical services to a larger population. Primary care-oriented healthcare systems have proven to be more successful worldwide, especially in countries where non-communicable diseases are more common. It helps detect the diseases before escalating to challenging phases; this allows easier management of the condition at a considerably lower cost (Fazal et al. 2022). The implementation of primary and prevention care approaches requires time-to-time research to offer the needed information for informed and evidence-based policies. Therefore, funding for research programs and laboratories to develop novel diagnostic procedures and drugs remains critical in the quest to minimize healthcare costs. Conducting research and educating paramedics, nurses, and pharmacists to take a more proactive role in providing healthcare will help improve patient outcomes and reduce errors at affordable prices.
Conclusion
The increasing cost of healthcare remains a pressing issue in America and globally. Although different measures have been implemented before, the need to invest in primary healthcare, prevention care and funding research remains the ultimate goal of achieving universal health affordably. Investing in prevention care and primary health care minimizes disease control costs and offers the patient better health outcomes before the disease escalates to greater and unmanageable phases, which still require massive expenditure, unlike prevention care and primary care. On the other hand, investing in research enables the healthcare industry to make informed decisions in regard to different health issues and make informed policies. The policies are based on forehead planning, considering other uncertainties that may arise and handling them promptly. Therefore, prevention care remains ideal than curative care in terms of cost and offering the patients better health outcomes; the key stakeholders should consider this approach to minimize the cost of healthcare and promote productivity.
References
Centers for Medicare & Medicaid Services (CMS.gov.). (2023, December).National Health Expenditures 2022 Highlights. https://www.cms.gov/newsroom/fact-sheets/national-health-expenditures-2022-highlights/
Fazal, F., Saleem, T., Rehman, M. E. U., Haider, T., Khalid, A. R., Tanveer, U., … & Noor, A. (2022). The rising cost of healthcare and its contribution to the worsening disease burden in developing countries. Annals of Medicine and Surgery, 82. DOI: 10.1016%2Fj.amsu.2022.104683
Freeland, M. S., & Schendler, C. E. (1983). National health expenditure growth in the 1980’s: an aging population, new technologies, and increasing competition. Health Care Financing Review, 4(3), 1. DOI:10309852
Neiman, P. U., Tsai, T. C., Bergmark, R. W., Ibrahim, A., Nathan, H., & Scott, J. W. (2021). The affordable care act at 10 years: evaluating the evidence and navigating an uncertain future. Journal of Surgical Research, 263, 102-109. DOI: 10.1016/j.jss.2020.12.056
The White House. (2024, March).Fact Sheet: President Biden Takes New Steps to Lower Prescription Drug and Health Care Costs, Expand Access to Health Care, and Protect Consumers. https://www.whitehouse.gov/briefing-room/statements-releases/2024/03/06/fact-sheet-president-biden-takes-new-steps-to-lower-prescription-drug-and-health-care-costs-expand-access-to-health-care-and-protect-consumers/
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