Facts on the Cost of Health Insurance and Health Care Part 1

August 26th, 2009 by admin

By several measures, health care spending continues to rise at a rapid rate and forcing businesses and families to cut back on operations and household expenses respectively.

In 2008, total national health expenditures were expected to rise 6.9 percent — two times the rate of inflation.1 Total spending was $2.4 TRILLION in 2007, or $7900 per person1. Total health care spending represented 17 percent of the gross domestic product (GDP).

U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.3 TRILLION in 2017, or 20 percent of GDP.1

In 2008, employer health insurance premiums increased by 5.0 percent – two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,700. The annual premium for single coverage averaged over $4,700.2

Experts agree that our health care system is riddled with inefficiencies, excessive administrative expenses, inflated prices, poor management, and inappropriate care, waste and fraud. These problems significantly increase the cost of medical care and health insurance for employers and workers and affect the security of families.

National Health Care Spending

  • In 2008, health care spending in the United States reached $2.4 trillion, and was projected to reach $3.1 trillion in 2012.1 Health care spending is projected to reach $4.3 trillion by 2016.1
  • Health care spending is 4.3 times the amount spent on national defense.3
  • In 2008, the United States will spend 17 percent of its gross domestic product (GDP) on health care. It is projected that the percentage will reach 20 percent by 2017.1
  • Although nearly 46 million Americans are uninsured, the United States spends more on health care than other industrialized nations, and those countries provide health insurance to all their citizens.3
  • Health care spending accounted for 10.9 percent of the GDP in Switzerland, 10.7 percent in Germany, 9.7 percent in Canada and 9.5 percent in France, according to the Organization for Economic Cooperation and Development.4

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Medical Facilities Blaming Everyone Else For Their Woes

July 1st, 2009 by admin

Medical facilities are having layoffs and scrapping or delaying building projects and more closings and mergers are on the way, industry consultants predict.

They’ll get taken over by somebody else, if they need to exist, and if they don’t, they’ll just be shut down. Most endangered are rural hospitals and urban ones in areas with excess hospital beds and a lot of poor, uninsured patients.

Hospitals are reporting that their donations are down, patient visits are down and their profitable diagnostic procedures and elective surgeries have decreased as people with inadequate insurance delay care. But those patients are turning up later at ERs, seriously ill, making it tough for hospitals to lay off nurses and doctors.

The Oh Woe Is Me Problems– stingy reimbursements from commercial insurers (whom are trying to make a profit themselves), even-lower payments that generally don’t cover costs for Medicare and Medicaid patients, and high labor and technology costs. Medicare and Medicaid is set to pay close to the actual cost, not much if any profit for the procedure itself, nor the salary of upper management.

In the past few months, patients and insurers have been paying hospital bills more slowly. As a result, some think hospitals will start demanding up-front payments for elective procedures, which will lose patients.

When I worked on a lawsuit for the state of Indiana I had to prove that Medicaid was paying the appropriate dollar amount to providers. I took into account the salary of the work employees, automobiles, insurance or supplies used. Amazingly, when the salary of the owners, administrators, top management was not included the amount paid did make a profit for the service rendered.

As insurance changes the salaries of the top management for medical facilities will have to drastically change and also for insurance companies top management.

Few hospital are willing to have a true cost consultant come into their facility, because they know they will find a huge waste of money in many areas. Hospitals and other medical facilities are using the General Motors Model and not the Toyota model.

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