Is Health Care Spending A Problem?

Rising health care spending is driving a triple crisis in U.S. health care; the disappearance of employer-based coverage; the gradually developing crisis in Medicaid; and Medicare is threatened by rising health costs. The whole system of employer-based health care is dealing with severe costs issues.

There are several reasons for these issues, but mainly health care costs at current levels are now so large that companies are cutting costs by reducing coverage or increasing premiums. Unfortunately it is usually both. Eventually, we may see the whole employer health care initiatives go away.

Advances in medical technology, which causes doctors to spend more on their patients because newer services are available, leads to higher insurance costs which a lot of people cannot afford. More individuals are losing their health coverage because they cannot pay the premiums or the co-insurance payments. The uninsured are a growing number in the U.S.

As an example of advancing technology, the cost of a hip MRI is $1,800, and this procedure was not available ten years ago. This will surely make insurance more costly, but it is diagnostic technology that orthopedic doctors will use frequently.


Medicaid and Medicare
In the US health care system nearly half of total health care spending is funded by the government. Most government health care costs are for two social insurance programs; Medicare and Medicaid. Today, Medicaid and Medicare are essential parts of the American health care safety net. In 2004 they covered a combined total of 77 million people. Medicaid is growing even more because it's picking up where the employer-based system stopped in many instances. The number of individuals who aren't eligible for Medicaid is a rapidly growing number.

Many experts believe the actual delivery of health care services is ineffective and not cost-efficient. Private insurers, for-profit hospitals, and other characters who add cost are in control of much of the health care costs in America. The profit makers leave a questionable contribution to the U. S. Health care system.

Is health care spending a problem?

In 1960 the United States spent only 5.2 percent of its GDP on health care, but by 2004 that number had risen to 16 percent. Health care costs in America are higher than food cost for America families. Technological advances have resulted in higher medical costs; not lower. The technology that benefits most people is contributing to 35 million individuals with no health insurance coverage and that's the major problem.