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Cost Drivers of Healthcare

Healthcare stateside is expensive. Several factors come together to make our system so expensive but two of the most fixable factors are the cost of drugs and the state of our citizenry’s systemic health.

The two single biggest contributors to increased prices are evolving technology and the needlessly high cost of pharmaceuticals (Altarum, 2018). While it is true that drugs need to have extra padding in their pricing to fund research (which contributes to healthcare advances not unlike the aforementioned new technologies), much of the money brought in from the medications that people use to stay healthy or prevent their diseases from worsening goes to excessive advertisements (Emanuel, 2019). By lowering the cost of medications, much of the price of staying healthy would also decline.

Additional factors driving up healthcare costs can be attributed to malpractice, wastage, and the current health status of Americans (Altarum, 2018). Ailments directly related to poor diet like obesity, type II diabetes, and hypertension account for almost 50% of the total cost of healthcare in the US (Waters & Graff, 2018). Smoking, and the added risks of lung and cardiovascular diseases that come with it, are also modifiable factors to the state of America’s health on an individual level (Alarum, 2018).

Altarum Healthcare Value Hub. (2018). Interactive cost driver infographic. Retrieved from https://www.healthcarevaluehub.org/cost-and-quality-problems/interactive-cost-driver-infographic

Emanuel, E. (2019, March 23). Big pharma’s go-to defense of soaring drug prices doesn’t add up. Retrieved from https://www.theatlantic.com/health/archive/2019/03/drug-prices-high-cost-research-and-development/585253/

Waters, H & Graff, M. (2018, May 31). Chronic disease is taxing our health care system and our economy. Retrieved from https://www.statnews.com/2018/05/31/chronic-diseases-taxing-health-care-economy/

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