Poor Outcomes because of High Spending (con’t) – Katie Bae

Moving on to administrative costs, in the United States, the mode of decentralization within the private sector results in multiple insurance companies, instead of one, overarching system, which means hospitals and physician offices will need extra administrative help. Not only will this increase administrative costs, but having increased personnel and more people involved in the medical process will also lead to higher liability insurance premiums. In an attempt to recover these additional costs, hospitals will increase the price of medical services which will in turn, increase insurance premiums for services. Furthermore, people in the United States receive far more intensive care, particularly at the end of life, with increased spending on pharmaceuticals and advanced machine technology. The United States is consistently one of the top three owners of and investors in imaging technology units per million population. Indirectly, this spending takes away from any attempts to reduce pharmaceutical expenditures, restricting any kind of shift towards generics and the end of patents of costly drugs. There are many debates as to whether this prolongation of care is appropriate or unnecessary in terms of the return, extended time and quality of life during this period, and cost of care. In fact, statistics show that though heart attack patients in the U.S. receive more care than those of other countries, survival one year after the heart attack is no greater compared to elsewhere.

In general, prices are rising as a function of the mechanisms listed above which exacerbate and contribute to the United States’ status as the largest spender of health. Finally, we will consider the consequences of this increased spending and how these ultimately lead to poor population health outcomes.

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