Major trends are happening within the health care industry across America. Health care costs are on a continuous increase in the United States. National health expenses are projected to increase by 20% over the next 7 years (Carroll, 2007). This projection creates a "domino effect" that translates into higher health insurance costs for employers. Furthermore, higher health care costs for employers impose a greater financial burden on workers.
Why are Rising Costs a Health Care Trend?
There are many factors that contribute to the rising costs of health care. First, there is an overall increase in the demand of health care services. The increased aging population contributes to this demand because of the likelihood of chronic illness with age. In addition, the possible need for long-term care increases with age. Families who choose to put their aging loved ones in institutionalized care actually contribute to this health care trend.
Technology and research are other important factors when talking about health care. New treatments for illnesses are discovered everyday. These new treatments are great for tackling disease; however, the cost can often be too much for patients to handle. Moreover, each year, prescription drug prices continue to rise.
The Consequences for High Cost Health Care
Working people feel the effects from the rising costs of health care because the increased costs to employers are passed down to employees. Over the last several years, employee deductibles and co-payments have increased. The amount people have to pay out-of-pocket for care has risen. And finally, prescription drug co-payments, even for generics have increased.
These higher costs are causing some employers, especially small businesses, not to offer health care programs to their workers. In these cases, many Americans are choosing not to purchase health insurance on their own because of the rising costs. Current estimates state that 45 million people have no health insurance during a given period of time within a year (Carroll, 2007). This is a health care trend that policy makers need to be aware of in order to plan for reducing costs or lessening the financial burdens for employers and families.
Implications for Health Care Public Policy
According to Miller (2002), another factor affecting the rising health care costs involve current public policy. The costs of health services regulation are excessive both on the federal and local levels. Furthermore, administrative costs such as marketing and billing programs are more of a factor now than ever before. The health care industry is now a competitive force where every service, prescription drug, or hospital has to gain a competitive advantage in order to survive.
Although there are many new trends in health care, the rising costs of overall health care services are the most prevalent issue to date. There may be many reasons behind these rising costs but everyone can agree that there needs to be a solution to make health care more affordable. Reform is necessary in order to ensure that all Americans have access to health care.
References
Carroll, R. (2007). The Economic Effects of the President's Proposal for a Standard Deduction for Health Insurance. National Tax Journal, 60(3), 419-431.
Miller, T. (2002). Rising Health Care Costs: The new role for consumer empowerment, greater cost medical savings accounts, and two tiered defined contribution health plans. Presented for the Wisconsin Assembly Committee on Health.
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