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Americans are facing a difficult and continuing issue with rising healthcare costs. This affects both individuals and businesses as well. The purpose of this paper is to examine the contributing factors to healthcare prices in America.
Factors contributing to healthcare cost rise
- Technology and Innovation: Increased healthcare costs can be attributed to increased use of innovative technologies and new healthcare innovations. The high-tech medical equipment, such as MRIs, CT scanners, and robotic surgeries, are vital in treatment and diagnosis. Research and development of medical devices and drugs requires substantial investments, which can lead to high costs to cover the cost.
- Administrative and overhead Costs: Rising healthcare costs are a result of rising administrative and overhead costs. Healthcare is complicated, as there are multiple payers. The billing process can be complex and requires substantial administrative and overhead expenses. Healthcare providers are also subject to increased regulations, contributing to an increase in healthcare costs.
- An aging population: Healthcare costs have risen in America due to an aging population. Because of their age-related conditions and diseases, older people require more healthcare services. With the baby boomer generation reaching retirement age, healthcare needs are increasing.
- Chronic Diseases: These chronic diseases, such as obesity and diabetes, are common in America and need to be managed. As these diseases require ongoing care, expensive treatment and lengthy-term care, healthcare prices have risen.
- Healthcare costs are rising due to Medical Malpractice. This is because of the high cost of malpractice insurance and medical malpractice claims. The settlement of medical malpractice cases can prove costly, which could lead to an increase in insurance premiums. This can result in higher healthcare costs for patients as these increased costs are frequently passed on to them.
Multifaceted and complex factors are responsible for the rising cost of healthcare in the United States. In addition to increasing healthcare costs due to innovation and new technologies, there are also increased overhead costs and administrative costs. To address these issues, a multifaceted approach will be required that includes stakeholders like patients, healthcare providers and policymakers. To reduce rising healthcare costs, strategies such as reducing overhead and administrative expenses, encouraging healthy lifestyles and the prevention of chronic diseases and reforming medical malpractice laws may be helpful.