Healthcare Costs Continue Upward Climb
We've all seen what COVID-19 can do to human bodies. More than 85 million Americans have been infected and over 1 million died as of this writing.
We've also observed what the coronavirus can do to behavior patterns. Facemasks, social distancing and increased hand washing became the new normal very quickly.
In addition, we've watched as reactions to the pandemic widened the gap between the two main political parties.
Regardless of whether COVID-19 fades away quietly or causes another surge this fall, something else has been affected as well. Something that is likely to stay with us for a long time.
Healthcare Workers Are Burned Out
I'm referring to the spiraling costs of healthcare in America.
Many healthcare workers became overwhelmed during the height of the pandemic. Some who never would have considered another career walked away. Due to disillusionment and burnout.
A February 2022 survey revealed that 50% of healthcare workers said they were burned out. And 25% were considering leaving the healthcare field soon.
A number of those workers were angry because they didn't believe their doctor's offices, clinics and hospitals were doing enough to protect them. Morale was at a low point.
Others became infected themselves and inadvertently spread it to family members. And some of those family members didn't make it.
Hospitals Are Taking a Hit
When we look at our doctors' and hospital bills, we might think these institutions are getting rich at our expense.
But the fact is, many are struggling financially. Their profit margins are shrinking. In fact, some are on the brink of closing permanently.
One of the chief causes is inflation. Even if you only count the costs of drugs, it's significant. They are up by nearly 37%.
James Spencer is a data scientist at GlobalData. He said, "Our healthcare industry is in dire need of financial help. Or a policy restructure to allow it the financial freedom to… respond to our needs… without collapsing."
The less financially solvent these institutions become, the less likely patients will get the type of care they need.
More Care Means More Money
COVID-19 provides another reason why the healthcare industry is in trouble. Due to what is called "long COVID," many patients need extended care.
The healthcare system is used to people needing help, getting help and then returning home in better shape.
But millions have suffered ongoing symptoms of the virus. And this has caused them to return for care.
Even before long COVID became prominent, coronavirus patients needed about 10% more inpatient time than the previous average. Considering the millions who required care, that added up quickly.
Staffing Agencies Take Advantage
As expected, healthcare facilities responded by purchasing the infrastructure and tools they needed to deal with the onslaught.
They also hired many more healthcare workers. But staffing agencies saw this as a chance to profit. So they increased their hourly wage for contracted labor.
Those agencies suddenly went from a profit margin of 15% to 65%. Great for them, horrible for healthcare facilities. And for patients.
As a result of having to pay more for additional healthcare workers, hospitals' costs rose by about 20% compared to the pre-pandemic era.
It's Worse Here Than Elsewhere
Is this happening all over the world? Well, yes and no. Healthcare spending is rising in the U.S. more than anywhere else. America accounts for a staggering 40% of global health spending.
Back in 1960, healthcare spending made up only 5% of the total gross domestic product of the country. In 2020, it reached nearly 20%. That's one-fifth of the U.S. economy.
And it's not because Americans use healthcare more than people in other countries. They just pay more for those services and drugs.
Because healthcare costs generally outpace inflation, they grow faster than the economy. And with inflation, those costs are representing a larger share of the economy.
$6.8 Trillion by 2030?
Total healthcare expenditures rose to $4.3 trillion last year. That's according to the Centers for Medicare & Medicaid Services.
That amount is expected to rise to $6.8 trillion by 2030. In other words, the experts aren't expecting things to improve any time soon.
Where does all this money go? Thirty-one percent of it goes to hospitals and 27% goes to other healthcare facilities.
Twenty percent goes to physicians and clinics, while 8% goes to prescription drugs. Then you've got 4.8% for nursing care, 3.5% for dental and 3% to home healthcare. The remainder is miscellaneous.
Prevention Trumps Treatment
Some people put the blame for healthcare costs in America on our philosophy of care. We spend more energy and resources treating illnesses than we do trying to prevent them.
Yaseen Hayajneh is an associate professor of health administration at Western Connecticut State University. He said, "The way the system is structured now, it is a cure-driven system, not a prevention-driven system."
Dr. Tyeese Gaines is an emergency medicine physician. "Preventing diseases from getting worse is always going to cost less," she said.
With more than one-half of Americans acquiring healthcare through an employer, insurance plan choices are limited. This reduces competition. And that drives prices up.
I'd love to provide you with a solution for the problem of healthcare costs. No one can do that. Please do everything possible to get and remain healthy. That's all any of us can do.