RisingHealth Care Costs
RisingHealth Care Costs
Healthcareexpenses account for a significant proportion of personal andgovernment expenditure in the Untitled States. Healthcare demand isfairly inelastic especially in instances where an individual is verysick. The sensitivity to price diminishes as a person’s healthcondition worsens (Bade& Parkin, 2015). However, other medical procedures such as plastic surgery, purchaseof eyeglasses and elective surgery procedures are fairly elastic toboth price and income. Lifestyle changes, as well as changes in thecountry`s demographic composition, have contributed immensely to therising healthcare costs. A substantial proportion of the populationis aging, therefore, leading to a corresponding rise in the demandfor medical services (Bade& Parkin, 2015).Additionally, many people have adopted unhealthy lifestyles leadingto lifestyle-related illnesses such as hypertension, diabetes andcertain types of cancer.
Theincreased demand for specialized services such as mental health carehas increased the cost of medication. Such services are price andincome inelastic, just like long-term care services. Demand fordental services, mental health care, and long-term health care ismore elastic among insured consumers than other services (Bade& Parkin, 2015).Thedemand for belter technology in the provision of health services hascontributed to the rising costs of healthcare. Such technologicalinnovations demand specialized personnel and training that do notcome cheaply. Additionally, we are demanding new drugs every day athigher frequencies as the medical conditions become more complicatedthan before (Bade& Parkin, 2015).
Hospitals,on the other hand, have gained the desired market share, especiallywith the disappearance of the lone doctor. This is further worsenedby the fact that consumers do not consider the cost of medication, inmany cases assuming that higher costs represent better healthservices (Bade& Parkin, 2015).This environment, therefore, provides healthcare companies theperfect opportunity to charge exorbitant prices. Moreover, hospitalshave fragmented healthcare services leading to information asymmetryamong consumers regarding the cost of medication. The above factorswill continue pushing up the cost of healthcare, in particular withthe limited government intervention.
Bade,R., & Parkin, M. (2015). Essentialfoundations of economics.Prentice Hal