The Rising Cost of Health Care

The Rising Cost of Health Care

1.0 Introduction

From 1980 to 1990, per capita healthcare expenditure increased by 156%. In 1990 to 2000, the cost invested in health care was less than the amount spent in the latter years- 71%. Supporting factors for the low observed cost were economic relief provided by the increased popularity of managed care and healthcare organizations (HMOs) in the healthcare industry. However towards presently, there is an observed increase in health care and a weakened economy. This is due to severe competition and congestion in many industries that has made it challenging for the businesses to exercise the increased costs to their clients. As a consequence, these costs in terms of premium costs are being transferred to the employees. Additionally, the managed care organizations have ceased to function in the marketplace as a result of being forced to lower down their standards in order accommodate the client’s needs in terms of flexibility and choice (Weatherly, pp. 1-2).

2.0 The causes

The Americans have a greater amount of wealth which they which they can spend readily. However according to authoritative analyses, the amount of money spent is well above the average a common person’s expenditure. In the US, the amount of money that the doctors and the hospitals are paid is more that what other countries pay to their medical experts. Furthermore, there is much dependence on medical expertise that is costly due to technological advancement such as CT scans and M.R.I machines and it largely relies on expensive surgical or medical procedures (New York Times, pg1).

            Moreover, doctors and patients are enticed to use more expensive ways of treatment by wicked insurance agreements; that make profits out of marketing expenses administrative costs and other profit gaining missions that do not affect the running systems of their government. However, the expenditure put on medical aspects such as neonatal care for low birth weight infants, mental drugs; cardiac drugs, devises and surgery, have saved and improved the quality of lives. On the other hand, this continued spending on the expensive medical services could lead to fewer finances in other equally important areas such as conservation of the environment, national security, research in science and education (New York Times, pp.1).

Research surveys have indicated a growth rate of 20 to 30 percent in prescription drugs. There are a vast lot of expensive new drugs in the market which are reported to be highly consumed. As well, the influence of the media (Television and internet), has influenced people to go to an extent of consumers asking for expensive drugs, just because of a brand name, when there are other drugs that work in the same manner. The enlarged number of people with medical insurance, who depend on the health care system, has increased insurance companies payment claims. As a consequence, the health care consumers have been made to incur the costs (Barabara &Heuer, pp1).

 Majority of the population in America will be turning 50 years in the next ten years. This implies that the a greater  number of people will be getting into a stage which will call for augmented health care services and this will directly increase the cost of health care provision. An estimate of 44 million Americans do not have medical insurance, hence insured clients cover them indirectly. The new bills that are being passed by the legislature will also increase the cost of health care, for instance, the Patient’s Bill of Rights, health care tax changes and the Medicare reforms (Lowery & Heuer, pp1).

3.0 Solutions

Inconsistency in health expenditures from one region to another has been shown in studies by researchers at Dartmouth; yet, the there is hardly any difference in health outcomes in either populations. As a strategy towards saving, the nation can cut down its costs so that they match the lower spending regions. This can be facilitated through changing the current medical practices, and it calls for the public and private insurers to denounce the high cost coverage that is of little value (New York Times, pp. 2).

The Congressional Budget Office cites that medical in the US is supported by the fact that it works. However, if doctors did an analysis on which treatments are the best, of considerable cost, a lot finances could be saved out using alternative medication sources.

Better managed care such as the HMO’s in the 1990’s, enhanced the managing care and it consequently brought down the cost. The health care system compared to other sectors in the economy, has little investment in information technology. It should be acknowledged that the burden of paperwork on doctors and hospitals, errors in medication and repetition of costly laboratory procedures as patients move in different medication centers, can be greatly reduced if all these information was kept in an organized computerized system (New York Times, pp. 2).

Preventive measures like exercise, regular checkup, appropriate nutrition, correct use of drugs, smoking and alcohol cessation, and aggressive screening are a key step towards improving health and lowering costs in heath care. Institution of policies in disease management, especially in chronic diseases that cost a lot of expenses in the health care; can improve the quality of the services offered and to some extent cut down on the cost.

For high prices in brand-name prescription drugs, the Medicare should bargain with the manufacturers so as to purchase drugs that are of cost but effective. In the same line, cheaper drugs can also be imported from other countries (New York Times, pp. 3).

4.0 Conclusion

The solutions to the stated problem can be implemented by policy makers and government officials. Many other approaches can be applied in controlling the costs. But it should be noted that the high rate of increased cost in medical services and health insurance premiums, if it goes on at the same trend, the consumers and the employers will be affected in terms of meeting the high cost of living and provision of quality services respectively. Emphasis on primary health care on the other hand, through medical programs and change in the compensation formula, can help in obtaining better health results at an affordable cost (National Coalition on Health Care, pp. 1).

Work cited:

Lowery, B.J. &. Heuer J.J: The rising cost of heath care, Almanac, volume 48 Number 25, 2002, URL:

National Coalition on Health Care, Health Insurance Costs., Retrieved on 24th February, from:, 2009

The New York Times: The High Cost of Health Care, 2007.

Weatherly, A.L.: The Human resource Magazine, the rising cost of healthcare: strategic and societal considerations for employees, September 2004.


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