It’s no secret that getting medical care is expensive, very expensive. More and more people are wondering the same thing, "If hospitals are supposed to be non-profit companies, Why does the care cost so much?" Depending on whom you ask you will get a radically different answer.
Cost shifting is a term that refers to the general increase in price that all hospital consumers must deal with because of those customers who, for whatever reason do not pay the hospital bill. In order to compensate for these patients, who total bills can run into the millions of dollars over a fiscal year, the hospital must raise its prices in order to be able to pay their utility bills and pay the staff.
Just how widespread are the instances of patients not paying their bills, you wonder. Well according to the National Coalition on Health Care an estimated 46 million people in the United States do not have health insurance.
Another reason for the increase in cost is the plethora of new test and technology available to physicians. These tests have some major upsides; they can give doctors a more in-depth view of the conditions that are harming their patients. In some cases these tests evens make conditions visible at an earlier stage of development, increasing the chance for the patient to recover quickly and for the least invasive measure to be used in treatment. This new technology however, does not come cheap and the cost of these new diagnostic procedures is passed on to the patients who receive them.
The final factors in the cost of a hospital stay are the administrative costs, and the cost of the documents that are there to ensure that the hospital is not sued. The SimpleCare Story by Vern S. Cherewatenko, Capitalist Magazine provides a look at the hidden administrative costs of the health care industry are massive. There are many administrators who exist simply to comply with medical privacy laws, like HIPPA, and to deal with the hospital regulatory agencies.
What about the doctors themselves? Their costs are increased by their liability insurance, the litigious nature of our society means that in the future the average doctor will most likely carry more insurance, not less. There is also the reality that doctors are testing for more and more conditions per hospital stay, in order to avoid any possibility of being sued for missing a condition.
In the end the problems of the cost of healthcare will not be easy to solve. It will take a collaboration of many people from healthcare, from administrative offices and from the law makers in order to change the cost of healthcare and keep the population of this country healthy for generations to come.
Related posts on the USA health care system on the Curious Cat Economics Blog.
