Rising Healthcare Cost in America

For several years now America has been experiencing a gradual but steady increase in the cost of healthcare. This is a significant problem for any nation because it more often than not result in negative consequences that affect many sectors and not only the health sector. It is important to understand some of the reasons why this is so. By understanding the causes of a rise in the cost of healthcare, then a nation may be better prepared to have measures to correct the situation. This paper explores the aspect of possible causes of rising healthcare costs. In brief, there are several reasons behind the rising healthcare cost. One of the primary causes of the increase in cost is the increase in demand. Another reason for increased cost of healthcare is the placing of additional taxes on the medical equipment. Unhealthy behaviors of the population also affects the general health, leading to increased number of hospitalizations. The increasing number of disease treatment episodes requiring hospitalization is another reason for rising health care cost. Greater use of health care by utilizing the service of emergency rooms for non-emergent conditions is another reason for rising health care cost. The healthcare cost could reduced by educating the patients on preventive care including immunization, dietary modification, increasing exercise habits and encouraging patients to utilize the service of primary care physicians and urgent care clinics.

Key words: Healthcare, increase, causes, preventive, care, hospitalization.

Rising Healthcare Cost in America


Among the various challenges that the healthcare sector of the US faces, there has been one that has particularly drawn the attention of stakeholders due to its detrimental effects that have now started being felt in society. One of the major issues that have recently continued to plague the US healthcare system is the rising cost of healthcare. It has increasingly continued to be less and less affordable for the population as days go by. The reason why this raises concern is that the rate of increase in healthcare cost is higher than the rate of inflation (Patton, 2015), therefore, for the average American who has an average income, it becomes more pinching to cater for their healthcare costs when they need it (Hosseini, 2015).  Some considerations make this a major concern to all relevant stakeholders, one being that such a system of increasing costs for healthcare services is unsustainable in the long run (Agency & Research, 2012). Placing the blame on the government or other unrelated factors is relatively easy, but the truth of the matter is that rising costs of healthcare begun way back as statistics show. Underlying problems that were not dealt with in past administrations have become more pronounced hence significantly affecting the healthcare system according to The Journal of the American Medical Association (1990). In this regard, it is critical to explore the causes for this negative trend for better perspective of the issue.

Causes of Rising Healthcare Costs

There are several reasons behind the rising healthcare cost, some that have more influence on the outcome than others. One of the primary causes of the increase in cost is the increase in demand for healthcare services. Economics laws dictate that, regardless of the sphere or area, more often than not, when demand increases, the price also increases together with it. Similarly, the American healthcare system has been a victim of this gruesome reality. As stipulated by the law, every citizen is mandated to have healthcare insurance coverage. For them that are employed, this can be done through their employers, while another option exists of purchasing the healthcare insurance policy through open marketplace  The later has been largely associated with causing the increased demand on the insurance agencies, as a result they have hiked their prices and consequently this has brought about increases in healthcare costs, this has been documented in the journal Health Insurance: Premiums and Increases (2016).

Apart from that, there is also another critical issue that has seen the placing of additional taxes on medical devices. For more efficient services to patients, hospitals, and clinics are continually purchasing new equipment, and at the same time there are those items that have to be used in a hospital setting without these devices it would be almost impossible to run a health clinic, items such as gloves and syringes. However, the road has not been smooth in the endeavor to healthcare services by purchasing better and more advance medical devices; the level of taxation on these items has been increased significantly. When the normal operating costs for hospitals goes up, for these healthcare institutions to stay afloat and not go bankrupt because they are unable to cater for their operating costs such as staff salaries and other needs, they are forced to also increase the cost of their services to their patients to be able to account for the tax difference and avoid loses. When this happens, the general healthcare cost goes higher. Statistical figures indicate that the ACA imposes 2.3% medical device tax, which is passed down to the insurance companies, which in turn results in the increase of the cost of medical devices, which ultimately will have to be shouldered by the patients (The institute for healthcare consumerism, 2016).

The list of causes for the rising healthcare cost also includes the aspect of the behavior of the American population. There are certain unhealthy behaviors among the masses that have been credited with aggravation of the situation. The government has often been on the forefront championing for education of the masses and creating widespread awareness that engagement in certain lifestyles is harmful, risky and detrimental to one’s health. However, in spite of the education and awareness campaigns among the public, people still refuse to quit their negative habits of smoking, alcoholism, improper diets and living with a lack of exercise. These habits when kept at for an extended duration of time, pretty soon begin to take a toll on the health of those practicing them. Soon when the lifestyles get to have the negative impact on the health of the people, they find themselves having more trips to the physicians’ offices. In simplicity, the effect of high rate of negative indulgences among a population is increasing in the number of hospitalizations required by people of any nation so as to improve their health and prevent further deterioration or even death. Eventually, the cost of healthcare for a nation shoots up due to increasing expenditure and greater volume of patients (Thorpe, 2005).

Also, associated with the problem of rising healthcare costs in America is the increasing number of people with chronic diseases. The American population has witnessed an upsurge of diseases like cancer and other chronic conditions. One particular issue that has generated lots of interest and forums by scholars and other medical professionals in an attempt to address it is the growing rate of children and adult obesity. Because of the percentage of those that are obese among a healthy population has gone up, there have also been increases in childhood and adult diabetes and also coronary artery diseases.

Increased use of healthcare services wrongfully and in a manipulative way is also another reason for the rising healthcare cost. People tend to utilize the services of emergency centers for non- emergency health conditions. The cost of using emergency centers is way higher than the cost of clinics or urgent care centers. The patients facing life-threatening situations could have been treated on time and possibly recovered sooner and with less expenditure on their healthcare if the emergency room physicians could have devoted their time for the patients being brought in as emergency cases, rather than such an ideal situation, most people visit the ER with common cold or flu or other less serious conditions. The accrued effect is higher healthcare costs for the nation.

Lastly, the higher percentage of the aged in the American society compared to past years is another reason for the increase in healthcare cost. The aged usually have many varied needs and need more sensitive healthcare compared to the more youthful population.  As the aging among the society keeps getting higher in number, there is an associated growth of healthcare needs. More funds will be needed to cater for the rising population of senior citizens; consequently, there will automatically be an increase in the health care cost (Willis, DeFina, Bachmann, Franzini, Shay, Gao & Berry, 2015). All these causes pose significant risk and demand for affirmative action so as to curb the problem of increasing healthcare costs. If left unchecked, there may be terrible repercussions to the nation.

Recommended Solutions

Now that the main causes of increased healthcare costs in America have been uncovered, there have also been various suggested recommendations aimed at improving the situation. As mentioned earlier, such a structure of ever increasing healthcare costs in unsustainable and at one point or another system will buckle due to the pressure. Among the top recommendations, thee following have been put forward; Improving and encouraging a more healthy lifestyle among the American masses. This will decrease the chance of developing diseases, which will, in turn, reduce the hospitalization and health care cost associated with hospital admissions. Education on preventive measures has also been encouraged to be conducted in schools and workplaces, and it is presumed that this will have a positive result in lowering the healthcare cost. At the same time, if possible it is said the Government should find ways to waive the medical equipment tax, the cost of medical devices would decrease considerably, which in turn might help in reducing the need for increasing the healthcare cost.  Holding people accountable for the behaviors and providing incentives to the patients who choose to make lifestyle changes will be an approach to solving this problem.