The high cost of health care.
Robert Atkinson
Communication 120
Professor Woods
November 23, 2008
Healthcare is obviously a vital expenditure for any country and most important to the people that obtain the care. In contrast to the rest of the world, the United States spends more than any other but does not boast a higher life expectancy than other countries, like Japan. The major factors in the cost of the healthcare inflation are drugs, staffing and more than any other, administration costs. Reports say that the United States spends over $400 billion more than other countries on healthcare but yet there is no significant disease behind the rise, which should be the reasoning for the much higher cost of care (Angrisano, Farrell, Kocher, Parker, & Laboissiere, 2007). What is driving the higher cost of care which appears to not benefit the public in the United States as much as other nations?
If there is a higher health care cost, then the appropriate thought is that there should be a better quality of life, which should lead to a longer life. However, high health care costs drive the public away from the doors of a hospital to seek treatment, even for problems that the patient deems serious (National Coalition on Health Care). The reasoning not to seek treatment is clear to many of the 1.4 million debtors that filed for bankruptcy in 2001. A study suggests that as many as half of the bankruptcy cases were due to just health care expenses (Himmelstein, Warren, Thorne, & Woolhandler, 2005).
Is bankruptcy by the public the reason that health care costs are so grossly inflated? Reporting by the group McKinsey gives no mention to bankruptcy being the problem, or even attributed bad debt to the rise. However, in Anchorage, hospitals are drawing a line from charity cases to higher costs. Charity cases are simply bad debt written off by the hospital, which by one estimate from Alaska in 1999 was $14 million. In contrast, another hospital in Alaska lost nearly half of the profits in just three years from $40 million for the year 2000 to $13 million in 2003, but climbed back two years later to recover “somewhat” to $27.5 million in profits (Dobbyn, 2005). For an institution that is dedicated to the care of the sick, profits of over $20 million seem hardly the problem for a higher cost to those that do have health care.
If the cost of bankruptcy is causing the higher cost of health care, then the solution for lowering the cost appears to the common layperson is to simply get healthcare. Unfortunately, this is still not the answer as the higher cost to the public that is insured still drives them to bankruptcy, as the average medical cost was over $12,000 even with coverage. In a study from 2001 of nearly 1,700 bankruptcy filings, a staggering 75% of those asked had health coverage at the onset of the filing. To make matters worse, since the debtors that had private insurance were out of work due to the illness, they could no longer afford the insurance and the costs rose higher (Himmelstein, Warren, Thorne, & Woolhandler, 2005).
From the Harvard study of 1,700 bankruptcy filings, a statistic stands out that can possibly explain the reasons behind lowered quality of care and the higher health care cost. The costs of the health care is divided up at around 45% to the hospital, doctors charged 20% and finally the prescription drugs needed to maintain health attributed to 21% of the cost. The debtors are given a charity case by the hospital that is making the lion’s share of the profits, a life preserver that should help stop a bankruptcy. However, the debtor can still be faced with bankruptcy due to the cost of the ongoing doctor and prescription care that combined is the cost that was forgiven by the institution (Himmelstein, Warren, Thorne, & Woolhandler, 2005).
From all this information, it seems likely to conclude that the cost of drugs and the doctor care is what drives bankruptcy. This makes more sense when the average cost of drugs in the United States is over 60% more than in other nations that have better life expectancy (National Coalition on Health Care).
References
Angrisano, C., Farrell, D., Kocher, B., Parker, S., & Laboissiere, M. (2007). Accounting for the Cost of Health Care in the United States. McKinsey & Company.
Dobbyn, P. (2005, July 21). Hospital bad debt driving costs up. Retrieved November 23, 2008, from Anchorage Daiily News: http://dwb.adn.com/front/story/6730104p-6617727c.html
Himmelstein, D. U., Warren, E., Thorne, D., & Woolhandler, S. (2005). MarketWatch: Illness and Injury as contributors to Bankruptcy. Health Affairs .
National Coalition on Health Care. (n.d.). Health Insurance Costs. Retrieved November 23, 2008, from National Coalition on Health Care: http://www.nchc.org/facts/cost.shtml