The Staggering Costs of HEALTHCARE

The doctor of the future will give no medication but will interest his patients in the care of the human frame, diet and in the cause and prevention of disease”—Thomas A. Edison (1847-1931)”

 

Yet pharmaceuticals have grown excessively from 2010-2018. 35% to be exact. In fact, in 2019 spending on prescription drugs did US$500 billion.

 

The Administrative burden costs too much

It was estimated that in the year 2019 the administrative cost of healthcare to the US GDP was $265 billion. The statistic is staggering, but there is more. In 2015 the American Academy of Family Physicians did a study. They found that there was a 90% increase in healthcare jobs. Yet those jobs were for administrative personnel. In the 4 years prior to the study, 95% of all hires were administrative personnel. They reported that the average administrative burden of any office was 3:1. That is 3 administrative personnel to every 1 medical provider. 

 

From the 2019 Research the costs were further looked at in terms of waste. That waste is part of the administrative burden. It was reported that the average employee spends 5.5 minutes on the phone per day with clients explaining the EOB from the insurance company. It accounts for a loss of $21.6 billion dollars. 

 

With these calls followed up with calls to the insurance company from the provider office, the burden of cost is $95 billion. And then there is the burden overall. It is reported that the more time that someone works in the healthcare field, the less productivity they have. It is typically reduced on average by 1% per year after the 3rd year of employment. 

 

People who regularly engage with the Insurance companies via phone or written correspondence report 10% less satisfaction and are 14% less likely to engage in the healthcare system. This can actually significantly delay care for more specific diseases like cancer, heart disease and diabetes.  

 

Overall Cost of Healthcare: $3 trillion annually or 28% of the total GDP

To keep that in perspective, only $50 million is spent on Physical Therapy each year. 

 

When Social Security and Medicare started in 1930, the average life expectancy was 58 for Males, 62 females. Currently the average life expectancy is 75 for males, 76 females. The age of retirement is 65 years of age, but many companies are offering retirement earlier as ways to age out more established people who have a higher salary burden to the company.

The cost of Medicare Benefits currently is $709.5 billion dollars and covers 58 million people. 

References:

https://careers.iconplc.com/blog/how-has-the-pharmaceuticals-industry-changed-in-the-last-decade–blog-01142312301
https://www.commonwealthfund.org/publications/issue-briefs/2020/jan/us-health-care-global-perspective-2019?gclid=Cj0KCQjw4cOEBhDMARIsAA3XDRgMlO9jpLc29krIJlv5syhuvP-VbwS-_nKmu0t7BNP5Q1bXKghA7qoaArggEALw_wcB