Where is all the money going?

Claire Geare, staff writer

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Healthcare economics is an extremely prevalent topic, which will impact students’ political views and personal experiences heavily, however almost nobody actually knows the details of the concept.

“I don’t know anything about money in our healthcare system, to be honest,” said Adrian Parraga, a sophomore honor roll student.

A new report from the America’s Health Insurance Plans Association finds that for every dollar spent on healthcare premiums, roughly 23.3 cents is spent on prescription drugs, 22.2 cents on doctor services, 20.2 cents on clinic visits, 16.1 cents on hospital stays, and the rest on assorted business expenses. To help ensure that premiums are being spent honestly, the United States government established the 80/20 rule that says at least 80percent of every dollar is given to insurance companies must be spent on healthcare costs. 

“I know that you pay a company, and when you go to the doctors office you don’t have to pay as much money,” said Mady Bachmeier, a sophomore honor roll student.

According to the The National Center for Biotechnology Information, the biggest cause of increased prices in healthcare are population growth, technological advancements, and an aging population. The U.S. Census Bureau projects that individuals age 65 and over will exceed 20 percent of the total population by 2030, causing price increases as many become eligible for Medicare. Another major cause of price increases are the flaws within the healthcare system. When patients without insurance seek emergency care, if medical bills go unpaid the hospital must deal with those charges.

“[Emergency rooms] have to see people whether they have insurance or not, they can’t refuse care. So, a lot of times when patients without insurance come in any treatment costs that creates is absorbed by the hospital,” said Charlene Bartholomew, a medical accountant with over thirty years of experience.

The United States spends the most money on health care, but our health outcomes are less than or equal to many other developed countries. The United States healthcare economy is huge, as one in seven American workers are employed in the health care sector, and in 2012 revenues in the industry exceeded expenses by 10.2 percent However, for all the money being put into healthcare, the results are extremely average. According to a report by Health Affairs, this is due to the medical system which can lead to waste in insurance payment systems and “the consolidation of hospitals, [leading] to a lack of competition or even a hospital monopoly, granting providers the opportunity to increase prices.”

The distribution, use, and causes of increase regarding the economics of the healthcare system is confusing to follow and difficult to explain briefly, causing miseducation and ignorance about one of the most important systems in the United States.