Is technology driving up healthcare costs?

Business Processes Outsourcing growth in USA United States

January 25, 2017

Austin Frakt, health economist for the New York times examines the causes of healthcare inflation.

“Every year you age, health care technology changes — usually for the better, but always at a higher cost. Technology change is responsible for at least one-third and as much as two-thirds of per capita health care spending growth. After accounting for changes in income and health care coverage, aging alone can explain only, at most, a few percentage points of spending growth — a conclusion reached by several studies.”

A recent survey suggests that the median American age will increase to about 40 by the year 2040. It is 37.7 today. This will cause health spending to increase from 5.5% of the current economy today up to 9% by the year 2046.

American life expectancy is increasing because the technology is getting better and helping us live longer by providing good treatments for many of the health problems. But these treatments are also costly causing an increase in health spending. Some of the major death causes such as cancer, heart disease, and stroke, etc. are being pushed off until later due to the treatments available nowadays.

A study suggests that most of this spending is spent during the last five years of life causing hospital expenses to grow up to 1000% as compared to a 30% increase in expenses at the early ages of life between 65 to 80.

In other words, spending is increased because of the expensive treatments for good health during the last years of life.

Telegenisys continues to do our part to hold down healthcare costs by taking on the paperwork and back-office tasks so that highly trained medical professionals can spend more time providing care.

 

Ref: https://www.nytimes.com/2017/01/23/upshot/blame-technology-not-longer-life-spans-for-health-spending-increases.html?ref=business&_r=0

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