The challenges in America’s healthcare system persist, with affordable, high-quality care remaining the exception instead of the norm. Over the last decade, healthcare costs have soared, significantly impacting personal finances and national budgets.
In 2023, federal subsidies for health insurance (except certain related payments made to the federal government) are estimated to be $1.8 trillion, or 7% of gross domestic product (GDP). Healthcare expenses now rank among the leading causes of personal bankruptcy. The need for systemic changes in healthcare economics is urgent, so how can industry leaders accelerate change?
In recent years, experimental strategies aimed at cost containment have been implemented, yet healthcare spending continues to rise. Factors contributing to this include surging prescription drug prices and fluctuating expenses across diverse healthcare sectors. There are new groundbreaking medications, such as GLP-1 drugs, that offer hope for better patient outcomes, but there are concerns regarding affordability, accessibility, and fair distribution.
Beyond the United States, drug pricing disparities reverberate globally. The lobbying efforts by pharmaceutical giants to incorporate life-changing medications into Medicare Fee Schedules underscore the issue: while these drugs promise transformative benefits, achieving equitable access and sustainable funding remains a challenge.
The practice of Americans seeking cheaper medications abroad inadvertently widens healthcare disparities in countries with weaker healthcare systems, emphasizing the need for fair, accessible drug pricing strategies on a global scale.
Americans are flying to Mexico to buy in Mexico... so not only do we have health care disparities in our own communities, but we’re trampling across borders and creating health care disparities in other countries that have a much worse health care system than we do.
The escalating costs of prescription drugs prompt discussions on aligning healthcare expenses with delivered care quality. Strategies for cost reduction must converge with initiatives aimed at maximizing patient outcomes. For example, increased access to services like CT scans signifies the fine balance between widening access and prudent resource utilization.
Sometimes you had to wait three days because that was the only CT scan they had. Fast forward to 20 years later, you walk into an ED and you get a CT scan. If it’s more available, does that drive overuse of those resources? There’s a positive and a negative there.
Without strategic management and decision-making aimed toward better care, there is a risk of the overutilization of diagnostic resources and improper resource allocation. Achieving high-value care mandates careful evaluation of technological advancements' impact on healthcare economics, ensuring responsible utilization without compromising patient care quality.
While technological strides enhance affordability and accessibility, a balanced approach to resource allocation becomes crucial, prioritizing high-value care over sheer accessibility.
Currently, the U.S. healthcare system is leveraging various technological advancements to reduce costs and improve outcomes:
The future of healthcare economics hinges on a collaborative effort to integrate technological advancements with policy reforms.
It’s a complicated picture. What I’ve seen is we’re developing a lot of technology that can reduce costs, but policy and people need to change in order to activate it.
Healthcare leaders who leverage technological advancements as tools for cost containment and improved patient outcomes will play a pivotal role in shaping a more sustainable and patient-centric healthcare ecosystem.
By fostering collaborations, leveraging data, and focusing on value-based care, healthcare leaders can pave the way for a future where cost-effective care and superior patient outcomes coexist. The journey toward affordable, accessible, and high-quality healthcare begins with informed leadership and prudent utilization of technology's transformative potential.
You can check out other hot topics, in addition to healthcare economics, on Spicy Takes, Episode 1. To learn more about making technology work for your organization, connect with us today.