Why are health costs going up?

• A third party payer system   Most patients simply do not know what health care costs. For example, a hospital stay may cost the patient $1,000 or so out of her pocket in deductibles and copayments. Yet the actual bill could reach tens of thousands of dollars. Since the consumer is not responsible for the entire bill, there is little or no incentive to seek less costly treatment.
  
  One of the newest plan designs on the market today, consumer driven health care plans, seeks to involve the consumer of health care much more in the buying decision. With high deductible health plans, the patient has a greater incentive to research the costs of health care and look for less costly alternatives where possible.
  
  
• New medical technologies   Everything from faster CT scans to targeted chemotherapies -- may be responsible for as much as 50 percent of U.S. medical cost growth, according to some health economists.
  
  
• Higher drug costs   Drugs represent the fastest growing part of the health care bill, with Americans paying the world's highest prices for medication. Rx costs are projected to increase 12.6% -- every year until 2010.
  
  Drug companies mass advertising campaigns not only directly increase drug costs, they also create a demand for brand-name drugs that may or may not be the best treatment for a condition.
  
  
• Uninsured population  
  • People who cannot afford insurance tend to have poorer health.
  • Uninsureds are more likely to rely on emergency care.
  • Emergency rooms substitute for the family physician and health insurance.
  • Poorer health and reliance on emergency care increase overall costs to the healthcare system.
• Aging population   As the population ages, greater amounts of health care services are consumed.
  
  

  Chronic illnesses / Obesity    The American Journal of Public Health notes the total US healthcare expenditure linked to obesity may exceed $39 billion per year. Experts believe that obesity is linked to many diseases, including type 2 diabetes, high blood pressure, certain cancers, and more.

• Lawsuits   resulting in higher malpractice premiums and defensive medicines