The Alarming Cost of Healthcare Creates Barriers to Access Summus February 29, 2024

The Alarming Cost of Healthcare Creates Barriers to Access

The Alarming Cost of Healthcare Creates Barriers to Access

No one can deny that the cost of everything—from gasoline to groceries—has gone up. Healthcare is no exception. Increasing healthcare costs have deterred many from seeking and accessing the care they need, based on concerns about affordability.

According to a recent poll by the Kaiser Family Foundation, nearly half of US adults indicate that it is difficult to afford healthcare costs, and 1 in 4 people shared that they or a person in their household struggled to pay for healthcare in the past year.1 This is not a problem experienced solely by the uninsured. Approximately 4 in 10 adults worry about paying for their monthly health insurance premium.2

Understanding the high costs

The high cost of healthcare is a multidimensional problem that includes national health spending, federal health spending, state health spending, employer health insurance premiums, and consumer out-of-pocket costs. These problems often overlap without a magic panacea to offset the costs. 

What’s driving high prices? In the US, high healthcare costs arise from:

  • Administrative costs. Time consuming administrative processes, from multiple private insurance plans and navigating the complicated billing reimbursement systems, place an immense burden on healthcare providers. These processes consume valuable time away from patient care care, and impact patients in the form of higher service charges. Administrative healthcare costs in the US exceed those in other developed countries.3
  • Fragmented system. Healthcare stakeholders—primary care, specialty care, hospitals, rehab centers, pharmacies, payers—are not incentivized to communicate and work together. These parties operate as isolated systems where patients must figure out how to navigate and access the right care for their needs, and are often subject to redundant testing and imaging and multiple provider visits, contributing unanswered questions about treatment.
  • Prescription drug prices. Private insurers can negotiate drug prices with manufacturers. However, Medicare is not able to negotiate drug prices. The lack of effective negotiation mechanisms and protections contributes to inflated drug prices, which pharmaceutical companies attribute to research and development costs. The US spends twice as much on prescription drugs compared to other wealthy countries.4
  • Defensive medicine. Today’s society is increasingly litigious, and healthcare is not immune. Physicians and hospitals want to avoid lawsuits and will often practice defensive medicine, where healthcare providers order unnecessary tests and procedures to protect themselves. In addition, the cost of malpractice insurance adds to overall healthcare expenses.
  • Lack of price transparency and regulation. The price of healthcare, whether it’s for a specialist visit or procedure, lacks transparency, making it difficult for healthcare consumers to price shop. What’s more, prices vary based on the payer and geography. To date, there is little regulation in pricing.  
  • Evolving financial models. Today, the fee-for-service model is prominent. In this model, doctors are reimbursed or incentivized for every surgery or service, not the patient’s outcome. This can contribute to over- or undertreatment. The Centers for Medicare and Medicaid Services are driving all Medicare beneficiaries to a value-based arrangement by 2030, signifying an unmistakable shift in the healthcare system towards capitation and other shared-risk models. These models have shown promising results for improved health outcomes and affordability. 
The ripple effect of cost on access

The consequences of high healthcare costs can be dire. People who don’t feel well may avoid seeing a doctor, while those with a diagnosed condition may postpone or forego treatment. While others may not be able to afford life-saving medication. Delayed treatment or foregoing treatment all together often results in more severe health complications and even greater costs. 

People who are uninsured or medically underserved typically bear more burden of not being able to afford healthcare, further exacerbating health disparities and creating a cycle of inequity. The economic strain forces many to make difficult choices between healthcare and other essential needs, like food and housing.

Employers also struggle with increasing healthcare costs. For any given employee population, 85% of the costs are concentrated in 20% of the claims. These costs accrue from specialty care, where most of the the complexity lives and inherently requires more resources and money. Cases in oncology, neurology, musculoskeletal, orthopedics, cardiology, rheumatology, fertility, and complex pediatric are major cost drivers.  

Comprehensive solutions support integrated health

Solutions that address the spectrum of health conditions and concerns, and offer clinical navigation, support overall and integrated healthcare. Integrated care alleviates redundancy and waste, which add costs to a patient’s journey.

Summus: The platform to access the best medical insights and expertise 

Specialty care is where the cost and complexity in healthcare live today and drives significant costs for employers and health plans. Summus addresses rising costs by bringing convenience, speed, and quality to the process of identifying and connecting employees and plan members with appropriate specialists. Summus connects you with the right doctor, at any point in the journey, across any health question. Better access, better decisions, better outcomes.

  1. https://www.kff.org/health-costs/issue-brief/americans-challenges-with-health-care-costs/
  2. Ibid
  3.  https://www.investopedia.com/articles/personal-finance/080615/6-reasons-healthcare-so-expensive-us.asp
  4. https://www.pgpf.org/blog/2022/11/how-much-does-the-united-states-spend-on-prescription-drugs-compared-to-other-countries

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