Why the price of healthcare is rising, and what you can do to lower you costs
The cost of specialty drugs is becoming a major challenge to the healthcare industry and to consumers. The average annual cost of a specialty drug for a chronic condition is now more than $53,000, more than twice the median income of $23,500. Expenses for developing niche drugs are high and they carry a much higher price tag for patients. The medicines can help cure some chronic conditions for patients and over the long-term lower healthcare costs. However, they carry a very high price currently. The question facing healthcare companies is, “how to deal with the current costs?”
We currently spend $2.9 trillion on healthcare annually. Rising drug prices aren’t the only reason for price hikes in health insurance premiums. Causes also include higher prices of medical services, paying for volume over value, defensive medicine, use of new technologies and treatments without considering effectiveness, and a lack of transparency of information on prices and quality. The causes of higher healthcare costs and spending are not simply or easy to solve, but they must be tackled or the impact will be severe.
There are many different healthcare plans to choose from and some are more comprehensive than others. Some will only cover essential treatments and are less expensive. The more comprehensive plans will carry a higher cost of ownership. You pay a monthly premium amount and your coverage pays for hospital care, doctors’ visits and surgery, based on the provisions in the policy. Open referral allows people insured to choose from specialists that have a record of delivering treatment and care without excessive costs.
However, rising prices in medical costs means bigger prices for health insurance premiums. Expanding coverage to new populations, new fees and taxes, broader benefit requirements, and the cost of services all factor into the cost of premiums. How this rise will affect you will depend on your current coverage, location, age, and income level. There are many benefits to having private healthcare insurance, but it is worth reading up on the most influential factors that go into premiums before committing to a provider.
There is no simple solution to lowering the growth in healthcare costs. Healthcare plans play an important role in lowering healthcare costs already by creating high-value payment systems to reward value and quality over volume. Healthcare plans also empower patients with new coverage options by focusing on high-performing providers and key tools like care coordination and case management for individuals with chronic conditions.
Innovative solutions like these, along with others including bundled payments where healthcare providers pay one lump sum for all the services needed to treat a patient with a particular condition or illness so that the incentive to do more simply to earn more disappears, are helping to restructure the way healthcare is organized and lower prices. These types of approaches are helping to move the nation away from the broken unsustainable fee-for-service system toward a healthcare system better suited for the future.
Why the price of healthcare is rising, and what you can do to lower you costs
Why the price of healthcare is rising, and what you can do to lower you costs
