Factors Associated With Increased Healthcare Cost

Introduction

The rising cost of healthcare has become a major concern for individuals, families, and governments globally. Increased healthcare costs lead to reduced access to healthcare services, financial burdens, and negative impacts on quality of life. It also affects low-income and marginalized communities. Factors such as advances in medical technology, chronic health conditions, an aging population, high drug prices, etc., contribute to increased healthcare costs. Also, addressing the rise in healthcare costs has drawbacks like lack of access to healthcare, reduced access to medical technology, and negative impact on healthcare providers.

What Are the Factors Associated With Increased Healthcare Costs?

Several factors are associated with increased healthcare costs-

1. High Demand for Healthcare Services: Increased demand for healthcare services increases costs. As the population grows, the demand for healthcare also increases.

2. Advances in Medical Technology: The availability of new technologies increases the demand for healthcare services as people look for these advanced technologies. These new technologies usually come with a high price tag, which drives up healthcare costs while using them. Using more advanced and expensive medical technologies results in increased cost of treatment.

3. Older Population: As people age, they tend to require more healthcare services, increasing costs.

4. Chronic Conditions: Chronic health conditions such as diabetes, arthritis, asthma, and heart disease require ongoing medical care leading to increased costs for treatment. These conditions, when complicated, need hospitalization, which adds to the overall costs of care.

5. High Drug Prices: Developing new drugs is an expensive and long process, and the cost of research and development is often passed on to the consumers resulting in high drug costs. The price is higher due to the competition if only a few drugs are available to treat a particular condition. Pharmaceutical companies also spend a lot on advertisements and marketing drugs that, contribute to high prices.

6. Lifestyle Practices: Unhealthy choices such as smoking, poor diet, and a sedentary lifestyle lead to chronic conditions that require medical care and contribute to healthcare costs.

How to Address Increasing Healthcare Costs?

A few ways to address this are

• Increase Competition: Encourage competition in the healthcare industry to reduce costs by providing choices for people. The availability of healthcare providers and insurance plans encourages providers to offer services at lower prices and to stay competitive. An increase in competition helps innovation in the healthcare industry as the providers look for new and efficient ways to deliver care, reducing prices. Competition causes improved treatment quality to attract patients, resulting in better outcomes and lower costs.

• Reduce Administrative Costs: Streamlining the process is a way to reduce costs and eliminate unnecessary steps. It includes electronic health records, automating billing and claim processes, and standardizing forms and documents. Bundled payments refer to the single fee for multiple services that helps reduce healthcare costs.

• Drug Price Negotiations: Governments and healthcare organizations should negotiate with pharmaceutical companies for lower prices for prescription drugs. Value-based pricing helps to reduce the price of drugs. Encouraging generic drug usage helps drive down drug prices.

• Encouraging Preventive Care: Preventive care, such as vaccinations or medical camps and wellness programs, reduce the need for costly medical treatment in the long term.

• Invest in Public Health: Investment in public health, such as clean water and sanitation access, improve healthcare access, or primary healthcare providers, help reduce preventable diseases and healthcare costs.

• Encouraging Healthy Lifestyles: Education, access to healthy foods or resources, and awareness about health prevent diseases and reduce the incidence of chronic conditions while lowering healthcare costs.

What Are the Advantages and Disadvantages of Addressing the Rise in Healthcare Costs?

Advantages:

• Improved Access to Healthcare: By reducing the cost of healthcare, more people will be able to afford the required services and medical care. It leads to better health outcomes for individuals and populations as a whole.

• Financial Security: Reduced healthcare costs will lead to a decreased financial burden for individuals and families, resulting in improved financial security.

• Increased Economic Productivity: Healthy people can work more and contribute to the economy. Reducing the cost of health care results in increased productivity.

• Improved Quality of Life: Reducing the financial burden of healthcare costs results in more disposable income that can be used for food and other necessities and improves the quality of life.

• Increased Competitiveness: Lower healthcare costs make a country’s business more competitive globally and have lower employee turnover.

Disadvantages:

• Reduced Access to Advanced Medical Technologies: Addressing the rise in healthcare costs can reduce access to expensive medical technologies.

• Reduced Investment in Research and Development: Suppose the price of healthcare products and services is lowered. Companies may need more financial incentives to invest in research and development, which could limit the availability of new and innovative treatments.

• Reduced Access to Specialized Care: Reducing healthcare costs reduces access to specialized medical care, such as certain types of surgery or cancer treatments.

• Negative Impact on Healthcare Providers: Efforts to reduce healthcare costs could negatively impact healthcare providers, such as hospitals or doctors, by reducing their revenue. It leads to layoffs or reduced investment in facilities and equipment.

How Does It Affect Low-Income Communities?

The rising cost of healthcare can have a particularly negative impact on low-income communities. They are:

• Reduced Access to Healthcare: Higher healthcare costs make it difficult for low-income individuals and families to afford medical care. It will lead to reduced access to healthcare, which can seriously affect health outcomes.

• Financial Burden: The cost of healthcare can be a significant financial burden for low-income individuals and families. They need help to afford the out-of-pocket expenses associated with medical treatment, such as deductibles and copays.

• Difficulty Paying for Prescription Drugs: The high cost will burden low-income individuals, who may struggle to pay for their needed medications.

• Negative Impact on Quality of Life: The financial burden of healthcare costs can negatively impact the overall quality of life for low-income individuals and families. It can be difficult for them to afford other necessities or improve their living standards when a significant portion of their income goes toward healthcare expenses.

• Disproportionate Impact on Marginalized Communities: Low-income and marginalized communities, like racial and ethnic minorities, are disproportionately affected by rising healthcare costs. These communities already face barriers to healthcare access and may be disproportionately impacted by the negative consequences of reduced access to medical treatment.

Conclusion

Many factors are associated with increased healthcare costs, including the severity and complexity of medical conditions being treated, the cost of medical technologies and facilities, administrative and regulatory expenses, overall demand for healthcare services in a particular area, and the prices negotiated between healthcare providers and payers. Addressing and understanding these factors help professionals, governments, and regulatory bodies to manage and reduce healthcare costs.