Though the government of the United States is striving to ensure its citizens are leading an improved quality of life, it is a sad fact that this has not been achieved. People can only attain better living standards by accessing better and affordable healthcare. Unfortunately, the cost of healthcare is rising at an alarming rate making it almost difficult for ordinary citizens to obtain health services. There is a need for the government to device proper mechanisms that will ensure that the cost of healthcare is regulated to make it affordable. Failure to take immediate measures might lead to detrimental effects both at individual and national level. Despite affecting the living standards of people, rising healthcare costs may cripple the economy as it indirectly affects other crucial sectors of the economy like education. Major factors that contribute to the rising costs include aging population, monopoly pricing power of providers, and poor care coordination.
Aging Population
The United States of America is an aging society. Its aging population in the United States is projected to increase by 9 percent in 2050. The aging population represents a group of people who have reached the age of 65 and above. The elderly population place pressure on the government to provide public-funded health and long-term healthcare services. The elderly are faced with chronic diseases such as Alzheimer’s disease, osteoporosis, and heart disease. These diseases require massive financing from the government in nursing homes, adult daycare, and congregate housing. Because of their deteriorating health, it becomes difficult if not impossible for the elderly to work. The tax base for the government is therefore reduced, and the working population is left to bear the burden of taxation. The resultant effect is a swell in healthcare cost which is burdening every American household.
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Monopoly Pricing Power of Providers
Healthcare providers have become greedy, and all they care about is profit maximization. Insurers and medical providers inflate the prices of their products by taking advantage of the vulnerability of healthcare seekers. Healthcare providers are consolidating and at times buying rival firms, allowing near-monopolies. Due to an increased market share, the monopoles are in a better position to demand higher prices for their services.
Poor Care Coordination
Poor care coordination leads to a situation known as fragmentation of care. The American Journal of Managed Care published a study indicating that care fragmentation increases the cost of chronic by close to $4500. Poor coordination across providers lead to repeat expensive and unnecessary tests, poor patient outcomes and suboptimal care which in turn raise and degrade healthcare quality.
Realistic Measures to Restrain Future Growth
Both the government and healthcare consumers have the power to restrain future growth and lower healthcare cost. Some of the measures include giving patients more information on healthcare pricing. Knowing prices of health products will enable patients to compare prices and avoid being exploited by unscrupulous business people. Another measure is for the government to develop a body that will negotiate drug prices for consumers. Medical organizations like Medicare can effectively negotiate fair prices for consumers and help bring costs down. The government can also restrict medical providers from merging and consolidating to prevent medical providers from gaining near-monopoly. Blocking merging will lead to an increase in the number of providers in the market which will increase competition, which will, in turn, lead to a decrease in prices and better quality services.
Conclusion
Though the government can contribute some effort towards lowering healthcare cost, healthcare consumers wield power to restrain future rising costs. The healthcare market is a free market and providers have the liberty to decide the prices they charge on their products depending on their operational costs. The government, therefore, has little say on the prices of healthcare providers and insurers charge. Armed with the right information on healthcare pricing, patients have the power in their wallets to decide on which healthcare provider they will spend their money on.
