Healthcare Blog

Posts tagged "healthcare cost"

Healthcare Cost Keeps Rising

Healthcare cost continues to rise and the Affordable Care Act (ACA) isn’t exactly affordable at all. The inflation of healthcare is rising faster than the American economies natural inflation rate. What is making healthcare rise faster than everything else? There are many contributing factors and one of the major ones is supply and demand. The demand for healthcare didn’t happen organically, it happened over night. When the ACA was passed the entire United States population had demand, but the supply stayed the same. Sadly the healthcare provider market hasn’t expanded much in response to the demand.

There are some new health insurance carriers that are trying to hedge their way into the market, but the successful ones get bought out by the larger more established companies. The inflation for healthcare is not just attributed to supply and demand though, it is also the result of political decisions and increased regulations as well as the cost of prescriptions, medical devices, and hospital care, according to an article on Forbes. Some of these were already an issue to rising healthcare costs before the ACA was passed, so why did congress put a 2.3% tax on medical devices under the ACA’s law? Doesn’t make much sense when you are trying to keep healthcare cost “affordable.”

Here is a graph that we pulled from Forbes comparing the natural rate of inflation against the healthcare rate of inflation. Will healthcare increases outrun our incomes if more competition doesn’t halt the monopolized lack of supply for the ever increasing demand? What are your thoughts on healthcare costs?

healthcare cost
Read the full Forbes article HERE

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Posted by Lauren Yeager in All Posts, Health Insurance, In The News and tagged , , , ,

Could There Be Medicare Savings In Prescriptions?

Several thoughts this morning arose as I was considering the cost of premiums versus the cost of doctors and prescriptions. What if there were regulations and guidelines that set parameters on all of the costs? Premiums increase Rxdue to the cost of care, and prescriptions remain high due to pricing set by pharmaceutical companies. It becomes an endless cycle of inflation year after year, but will there every be an end to the vicious increase?

An article posted on the Wall Street Journal offers a solution with a savings bolstered at $16B. The government regulates both Medicaid and Veterans healthcare expenses and price negotiations have minimized the cost on brand name drugs. Although, the cost of Medicare Rx remains high. So high the Wall Street Journal quotes, “27 of 31 countries in the Organization for Economic cooperation and Development have been able to purchase a select group of medication at less that 50% of what is paid in the U.S. they also maintain that U.S. costs per capita for pharmaceuticals are $1,010, which amounts to more than twice the $498 paid, on average, by OECD countries.” Then why are we being price gouged compared to these other OECD countries?

Why haven’t negotiations with pharmaceutical companies taken place to minimize U.S. costs also? The argument is that if negotiations are opened then Medicare Part D sponsors would have fewer incentives to offer favorable rebates and would result in higher premiums. The WSJ later in the article states, “Medicare Part D, even with its rebates, spends 198%, almost twice the median of the amount paid for brand name drugs in the 31 OECD countries.”

The call to action is to simply reduce the cost of brand-name drugs for Medicare to at least the same level as Medicaid or the Veterans Benefits Administration. This is just one proposed change to cut costs in healthcare, and there have to be many more ways that we can regulate spending to make our healthcare in America truly affordable. Do you have any ideas on how we can lower costs in healthcare? Read the full Wall Street Journal article HERE

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Posted by Lauren Yeager in All Posts, Health Insurance, In The News and tagged , , ,