4 Reasons Why Healthcare Costs are on the Rise
American businesses are noticing a frightening trend: healthcare costs are on the rise and there are no signs that the costs are slowing down. Studies show that healthcare spending per person has grown more than 4% in the past few years, with more individuals receiving support for multiple chronic conditions than ever before. This represents a 10-year rise of nearly 18% for individual healthcare services, which explains why healthcare utilization has stayed mostly flat while costs continue to go up. There are a number of factors that make up these figures, but the costs associated with longer lifespans and the intensity of medical services are key considerations for the future.
Growing Populations of Aging Seniors
The National Institutes of Health has seen an unprecedented change in the ratio of older people with an expected over 600 million individuals aged 65 or older. While people are living longer, that doesn’t necessarily mean that they are living healthier lives and that is the challenging issue for Americans. As the aging population increases, they will be taking up additional public health resources that would otherwise have gone to younger individuals or been used to spread a higher quality of care throughout all ages of the population.
Disease Prevalence or Incidence
There has been a marked increase in chronic illnesses, with diabetes being a major factor in the growing healthcare costs. The medication alone represented nearly $44 million in healthcare cost increases over a short period of time, but problems with neck and back pain were not far behind. Other chronic diseases that had a negative impact on the costs of healthcare include:
In addition, the costs associated with outpatient medicine continued to rise with ambulatory units seeing the greatest increases in that segment.
Medical Service Price and Intensity
With the rising costs, some patients are avoiding care until it becomes a necessity — which can often lead to additional problems that are much more expensive to manage. This avoidance of care doesn’t come due to a fear of doctors; instead, patients are more frightened about the potential costs that come along with getting the care that their family needs. The lack of understanding associated with high-deductible healthcare plans could be a key cause, which is one of the reasons that it’s critically important to ensure your staff fully understands their decision when shifting to this type of healthcare plan. On the other side of the spectrum, you have patients that are overutilizing their healthcare without optimizing their spending. This can lead to extraneous procedures, unnecessary visits and an overall rise in healthcare costs. Patients may be having trouble understanding their healthcare billing, as not all organizations have become fully transparent in the way they report healthcare costs to patients.
Healthcare may be one of the most challenging topics to introduce with your new staff members, but you’re sure to appreciate the great information you’ll find in our free download: How to Give Employees a Great First Week. Still have questions? No problem! Give the friendly and knowledgeable team at Innovative Broker Services a call at 916-932-2864 for more information about the services and tools that we offer to benefit your business.