Single Payer Healthcare - Effect on Medical Industry

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MUST READ - Comprehensive article on rising healthcare costs.. compare to the chart below.

The article is full of supporting links. It clearly shows how our current path is unsustainable.

Excerpt:

Between 1983 and 1992, health care costs rose by an average of 9.9 percent each year. Home health care prices increased by 18.3 percent per year. In 1986, Congress passed the Emergency Medical Treatment and Labor Act. It forced hospitals to accept anyone who showed up at the emergency room. If the patient couldn't pay, Medicaid covered it. Prescription drug costs rose by 12.1 percent a year. One reason is that Congress allowed prescription drug companies to advertise on television.

Between 1993 and 2010, prices rose by an average of 6.4 percent a year. In the early 1990s, health insurance companies tried to control costs by spreading the use of HMOs once again. Congress then tried to control costs with the Balanced Budget Act in 1997. Instead, it forced many health care providers out of business. Because of this, Congress relented on payment restrictions in the Balanced Budget Refinement Act in 1999 and the Benefits Improvement and Protection Act of 2000. The Act also extended coverage to children through the Children's Health Insurance Program.

After 1998, people rebelled and demanded more choice in providers. As demand increased again, so did prices. Between 1997 and 2007, drug prices tripled, according to a study in Health Affairs.

One reason is that pharmaceutical companies invented new types of prescription drugs. They advertised straight to consumers and created additional demand. The number of drugs with sales that topped $1 billion increased to 52 in 2006 from six in 1997. The U.S. government approved expensive drugs even if they were not much better than existing remedies. Other developed countries were more cost-conscious, according to The New York Times.



In 2003, the Medicare Modernization Act added Medicare Part D to cover prescription drug coverage. It also changed the name of Medicare Part C to the Medicare Advantage program. The number of people using those plans tripled to 17.6 million by 2016. Those costs rose faster than the cost of Medicare itself.

The nation’s reliance on the health insurance model increased administration costs. A 2003 study found that administration made up 30 percent of U.S. health care costs. It's twice the administrative costs in Canada. About half of that is due to the complexity of billing.

For example, U.S. private doctors' offices need seven people to do billing for every 10 physicians. A big reason is that there are so many types of payers. In addition to Medicare and Medicaid, there are thousands of different private insurers. Each has its own requirements, forms, and procedures. Hospitals and doctors must also chase down people who don't pay their portion of the bill. That doesn't happen in countries with universal health care.

The reliance on corporate private insurance created health care inequality. Those without insurance often couldn't afford visits to a primary care physician. By 2009, half of the people (46.3 percent) who used a hospital said they went because they had no other place to go for health care. The Emergency Medical Treatment and Active Labor Act required hospitals to treat anyone who showed up in the emergency room. These uninsured patients cost hospitals a staggering $10 billion a year. The hospitals passed this cost along to Medicaid.

Preventable Chronic Diseases
The second cause of rising health care costs is an epidemic of preventable diseases. The four leading causes of death are heart disease, cancer, chronic obstructive pulmonary disorder, and stroke. Chronic diseases cause all of them. They can either be prevented or would cost less to treat if caught in time. Risk factors for heart disease and strokes are poor nutrition and obesity. Smoking is a risk factor for lung cancer (the most common type) and COPD. Obesity is also a risk factor for the other common forms of cancer.

These diseases cost an extra $7,900 per person. That’s five times more than the health care costs for a healthy person. The average cost of treating diabetes, for example, is $26,971 per family. These diseases are difficult to manage because patients get tired of taking the various medications. Those who cut back find themselves in the emergency room with heart attacks, strokes, and other complications. (Source: “The Impact of Chronic Diseases on Health Care,” For a Healthier America, 2014.)

Recent research found that even Alzheimer's disease might be preventable. The study, called SPRINT MIND, found that high blood pressure could worsen dementia caused by Alzheimer's.

https://www.thebalance.com/causes-of-rising-healthcare-costs-4064878