In what two ways have each of the following affected the costs of health care in the US?

The health insurance industry

1. Employer based health plans are dwindling and or moving to a more cost sharing
approach
2. Health insurances are "teaming" up, merging with one another to remove
competition

Advances in medical care technology

o 1. Advances in technology has driven costs of healthcare through the roof
o Some primary reasons are the development of new treatments for previous
terminal conditions, such as diabetes, end-stage renal disease, and AIDS;
development of new procedures for discovering and treating secondary diseases
within a disease, such as erythropoietin to treat anemia in dialysis patients;
Expansion of the indications for a treatment over time, increasing the patient
population to which the treatment is applied; On-going, incremental
improvements in existing capabilities, which may improve quality; Clinical
progress, through major advances or by the cumulative effect of incremental
improvements, that extends the scope of medicine to conditions once regarded as
beyond its boundaries, such as mental illness and substance abuse (Mosley 2005).

Changes in U.S. demographics

o 1. Our constant influx of refugees and/or illegal immigrants has waged war on
our healthcare system.
o 2. Our population is living longer and getting older. The need for healthcare for
this group of individuals is expansive and straining the system. Between 2010
and 2050, the United States population ages 65 and older will nearly double, the
population ages 80 and older will nearly triple, and the number of nonagenarians
and centenarianspeople in their 90s and 100swill quadruple.1 The aging of
the population has important implications for future Medicare spending because
beneficiaries ages 80 and older account for a disproportionate share of Medicare
expenditures (Neuman, Cubanski, Huang and Damico, 2015).

Government support for health care

o 1. The Affordable Care Act, is just one example of government intervention into
the healthcare system that is adding costs. The amount of legislation, oversight,

programs, departments, not to mention, legislators that have a hand in our

healthcare is making costs sky rocket.
o 2. Continued "tweaking" of Medicare/Medicaid payment models. As our
population ages, its needs for healthcare naturally increase and account for a
disproportionate drain on Medicare dollars. "According to the Congressional
Budget Office, population aging is expected to account for a larger share of
spending growth on the nations major health care programs through 2039 than
either excess spending growth or subsidies for the coverage expansions
provided under the Affordable Care Act" (Neuman, Cubanski, Huang and
Damico, 2015)

Consumer expectations
o 1. Our consumer is more knowledgeable of treatment options. They know that
they can shop around and are beginning to do just that.
o 2. With so many advancements in medical technology, consumers expect that
their diseases are treatable and are willing to go through these invasive and costly
treatments as they expect to live a long life.

Chris
References

Neuman, T, Cubanski, J, Huang J, Damico A. (2015) The Rising Cost of Living Longer: Analysis
of Medicare Spending by Age for Beneficiaries in Traditional Medicare retrieved
from: http://kff.org/medicare/report/the-rising-cost-of-living-longer-analysis-of-medicarespending-by-age-for-beneficiaries-in-traditional-medicare
George B. Moseley III, Changing Conditions for Medical Technology in the Health Care
Industry(presented before the OGI School of Science and Engineering, Oregon Health and
Science University, October 18,
2005), http://cpd.ogi.edu/Seminars05/MoseleySeminarIndex.htm.