As healthcare costs continue to rise in the U.S., we explore some of the contributing reasons, as well as implications and impacts on consumers:
What factors are driving the rise in healthcare costs?
When it comes to the steady increase in cost of care, there are many factors to consider. In recent years, healthcare spending has seen not only an increase in usage, but in the intensity of services provided as well. Both have become primary drivers of rising healthcare costs. Additionally, between 2000 and 2020, the 65 plus population increased by 60%, and between 2020 to 2040, that’s expected to increase another 44%. As the U.S. population expands and ages, the healthcare industry will need to meet demand. Increases in chronic illness also directly contribute to more spending and rising costs – with diabetes, lower back and neck pain and high blood pressure rounding out as some of the most expensive.
The role of behavioral health support on healthcare costs.
Increasingly, mental and behavioral health services have also contributed to increasing healthcare costs. Primarily driven by therapy and prescription medications, as well as stays in psychiatric or substance abuse rehabilitation facilities, mental health treatment has become much more expensive in recent years. Even prior to the pandemic in 2019, the cost of mental health treatment and services reached $225 billion, up 52% from ten years earlier. As people have started to recognize the importance of behavioral health support as a necessity, keeping pace has proved challenging for the current infrastructure. Between the shortage of mental health providers, lack of access in rural areas and high costs for uninsured individuals, the healthcare system has plenty of room to evolve so treatment is more accessible for all.
The impact of prescription drug access on healthcare costs.
Every year since 2006, the cost of prescription drug prices has increased at a rate that far exceeds the general inflation rate, according to a report by AARP. Between 2019 and 2020, that increase was more than three times higher than general inflation at 4.8% versus 1.3%. Other studies report that during that time, the listed price of nearly 80 brand-name drugs rose by over 16%. As a result of cost increases and disparity in access, millions of Americans have been delaying or even skipping essential medications, regardless of their coverage status. The impact of limited prescription drug access can be increasingly significant among older adults in underserved communities, people with chronic conditions, Medicare beneficiaries and low-income women. Unfortunately, when people delay use of essential medications, the outcome can be new or even worsening conditions and ultimately more expensive treatments.
Reducing the burden of rising healthcare costs.
Many employers have made strides to help alleviate some of this burden for employees amid rising healthcare costs, especially during the COVID-19 pandemic. In addition to holding off on raising deductibles and other cost-sharing provisions, some employers have made changes that help reduce out-of-pocket health costs for their employees. Keeping employees’ physical and mental health top of mind by offering generous benefits can not only help attract and retain talent, but also help close the gap in healthcare disparities.