The True Cost of Healthcare

If you’re wondering why health insurance is so expensive in the U.S. (and who isn’t?) some recent data sheds light on one of the big underlying causes.

Sure, there are many reasons: the insurance companies make profit, there’s a lot of cost-shifting and the system is chaotic overall.

But one big driver of high premiums and co-pays is the increasing cost of major medical care itself.

Canadian insurance company Sun Life Financial recently combed its data, and compiled a listing of the costliest medical conditions covered by its stop-loss insurance program from 2012 to 2015.

According to the company, million-dollar-plus claims increased by 25% in just one year.

It’s not surprising when you look at what things cost (with data from various sources):

Heart Transplant — $997,000

Bypass Surgery — $75,345

Appendectomy — $13,910

C-Section — $15,240

Hip Prosthesis — $11,806

Newly-Approved Cancer Drugs — $10,000/month (average)

As you can see, costs are ridiculous for treating serious conditions. However, healthcare costs in the U.S. are high (relative to global standards) — and rising – for all sorts of treatments and drugs.

There’s no easy solution to this phenomenon of rising costs. As we said up top, the system is chaotic.

While a system like Medicare can control certain costs, the typical medical intervention is covered by private insurance – which itself is paid by a combination of employer and patient.

There’s no single “cost cop” in the U.S. healthcare system. In the past, many people were unaware of what their healthcare actually costs because they had full insurance. However, this is changing.

In the evolving world of health care, costs are increasingly being shifted to the patients themselves. Rising co-pays and ever-more restrictive insurance policies are prompting Americans to become more aware of what things cost.

New technologies (such as custom apps) are helping them to get a handle on costs, and to shop around. With patients getting more involved in paying for their healthcare, (and getting more fed up with the high prices), perhaps some new pressure will be brought to bear to reduce costs.

In the meantime, patients in the U.S. will continue to pay more, and more. And more.

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