Why are healthcare costs going up so much?

Question

Homes prices went up because of lower interest rates, etc. The cost to build one went up because of the huge demand of building homes which inflated the building materials. Insurance then went up because of double/triple values, and natural disasters.

Why the heck is healthcare, as reported on cnn going up so much? What has happened in the past few years to all of a sudden make health insurance, care, etc more then double?

Answer 1

The US population is aging, as people live longer and families have less children, and that means that there are less young workers to pay for the health care of all the old and retired. Therefore, each young worker has to pay more to support the growing number of old people in health care.

Answer 2

Simple: supply and demand. People keep consuming more and more health care. Meanwhile the supply of all the resources -- doctors, nurses, clinics, hospitals, equipment -- is constrained.

In any other industry, the situation would moderate. High prices would cause demand to flatten or fall, competition would force the suppliers to be more productive, and financial incentives would bring ever more suppliers to the market.

But in health care, there are a variety of anti market forces and distortions (not least of which is government intervention) that hamper the industry from reacting like a normal market would.

Answer 3

I must disagree with both vag and kev on this one. While theirs may play a bit of a factor, the largest contributors to our high cost of medical would be Lawyers and Insurance companies. OBGYN is a great example of this. To perform a Cesarean or not, if they do and the mama's lawyer thinks they shouldn't have, slap the doctors with a multi million dollar law suit. Insurance companies capitalize on this by jacking up their premiums.

So, the bottom line. America's propensity to take it to court has made our medical system so expensive.

Answer 4

Because alot of people don't pay their medical bills so those of us that do have to pay to recoup the losses.