Lowering Healthcare Costs: Are You Paying Too Much?

We’ve heard the stats over and over again, but when is enough, enough? The United States is now spending over 18% or nearly $13,000 per person on health spending each year. The systems and programs we have in place today are not making the forward progress we need to lower the cost of care for Americans.

So, what is driving the increase? It can be boiled down to 3 key components:

1.        Medical and Pharmaceutical Advancements

This one is obvious and has saved countless lives as a result of the modernization of technology and scientific advancements. The cost for research and development alone is anywhere between $4 and 10 billion. This is then shared to consumers as they seek and navigate care.

2.       The Bureaucracy between Stakeholders

This one may come as a surprise to the average consumer. Health systems have set their own prices for nearly a century with little to no regulation. This means that a standard procedure that should cost $6,000 at the fair market value can end up being $45,000. The insurance companies and providers negotiate contracts and each one is competing with one another for a bigger slice of the revenue – aka your healthcare dollars coming from premiums, cost-sharing, deductibles, etc.

3.       Lack of Accountability to Manage Health

This is one that all of us can improve on. We are constantly seeking the “magic pill” or the “secret sauce” that will help us lose weight quick or get rid of that annoying viral infection. We have to ask ourselves – are we doing everything we can to manage our health or are there areas that we can do a better job at preventing or further delaying the progression of a condition?

The second and third point are really what we need to be solving for. We cannot continue to manage the healthcare industry like a transactional business model where there are winners and losers. The losers are consistently the patient and employers, who are responsible for covering the astronomical cost increases. This model cannot be sustained, and as people begin to evaluate where their healthcare dollars are going, we are going to have to make some changes to how we manage care.

Where do you see us falling short? Where can we improve? I'd love to hear your thoughts in the comments.