Cost of Healthcare

Submitted by: , Diversified Financial Group/Envision Healthcare

If the answer to this question is YES, you are among millions of Americans who feel the same way! As most consumers know, our current HealthCare system in not working. Over the past 5 years, we have seen double digit health insurance rate increases across the board. Unfortunately, the current trend shows no end in site.

There are a number of reasons why we are seeing this. One of the most obvious is that medical costs over the last 20 years have risen dramatically. A second cause is something called "cost shifting." Currently aproximately 42 million Americans are uninsured and when these people recieve medical care, the cost of their services are "shifted" to people who do carry insurance. In 2001 a survey showed that managed care companies and employer groups nationwide incurred between 1.5 and 3 billion in excess premiums to cover part of the 24 billion in cost of care that was provided to the uninsured. All of these factors drive up premiums. Although these are significant reasons, I believe, as many other heatlh experts do, that the #1 reason we are seeing these trends is because OUR CURRENT HEALTHCARE SYSTEM IS BEING DELIVERED THROUGH A THIRD PARTY PAYER SYSTEM. What does that mean? When you or I go to buy a house or a car or any other goods or service; we shop around, we negotiate prices and we try to get the best deal that we can because we are spending our money. With our current healthcare system, when insured individuals receive medical services or care, it is their insurance company that negotiates the prices and reimburses the provider. For the most part these consumers are not involved in the process and in most cases have little to no idea of the cost of the services recieived. Consequently there is little incentive for the insured to offset medical costs by shopping for medical services or avoiding unnecessary or excessive utilization. In short consumers, for the most part, are not consumers when it comes to medical care. This in turn also gives many providers access to an "open checkbook" which consumers utilmately end up paying for through insurance premiums.

For more information, and some solutions to these problems, watch for future articles.

You may also contact at 952-854-5054.

Kathleen is a Health Insurance Specialist with Diversified Financial Group, a nationwide health insurance agency that specializes in helping inidividuals and businesses reduce the cost of their health insurance.