Unraveling the Complexity: Understanding the US Healthcare System and Its Expenses
Read time: 2 minutes.
Between January 2020 and December 2021, life expectancy dropped in the U.S. and other countries. Americans are more likely to die younger, and from avoidable causes, than residents of peer countries. In 2021, the U.S. spent 17.8 percent of gross domestic product (GDP) on health care, nearly twice as much as the average OECD country. But why is US healthcare so expensive and how do we handle the costs?
Why is Healthcare so Expensive?
Technological advancements: The development and implementation of new medical technologies, such as advanced diagnostic tools, innovative treatments, and pharmaceutical drugs, often come with high research and development costs.
Pharmaceutical costs: The research, development, and production of new drugs involve substantial investment, and pharmaceutical companies often set high prices to recoup those costs. The patent protection of drugs also allows manufacturers to maintain a monopoly on their products, further contributing to high prices.
Aging population and rising chronic diseases: As populations age, there is an increased demand for healthcare services and a higher prevalence of chronic conditions. These conditions require more ongoing care. A study from Front Public Health found that the population of 50 years and older, the number of people with at least one chronic disease is estimated to increase by 99.5% from 71.522 million in 2020 to 142.66 million by 2050.
Over utilization of services: Over utilization of healthcare services (unnecessary tests, procedures, and hospitalizations) can contribute to increased costs. Defensive medicine and patient demand for unnecessary treatments can also drive-up healthcare expenses.
Administrative costs: Healthcare systems require administrative staff to handle billing, insurance claims, and other paperwork. The complexity of healthcare billing and insurance systems can lead to higher administrative costs.
How Can I Handle Healthcare Costs?
Health insurance coverage: Having health insurance coverage that properly covers you will help mitigate the financial burden of healthcare expenses. Research and compare different insurance plans to find one that suits your needs and budget.
Preventive care: Prioritize preventive care and regular check-ups. By focusing on prevention and early detection, you can potentially avoid more costly treatments down the line. Start developing healthy habits early.
Generic medications: When prescribed medication, ask your doctor if there are generic alternatives available. These medications are typically more affordable than brand-name drugs and have the same active ingredients and efficacy.
Negotiate medical bills: If you receive a medical bill that you find excessive, contact the billing department to discuss payment options or negotiate a lower rate.
Seek out community resources: Investigate community resources and clinics that provide low-cost or free healthcare services. These resources can help you access necessary care at a more affordable cost.
Summary
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