Setting the Scene: The Rising Cost of Healthcare [Part 1]

This is Part One of a two-part series on medical funding and the current state of healthcare.

The landscape of healthcare is already on a slippery slope. But what’s more terrifying is that no one, insured or uninsured, is exempt from the steep costs of healthcare.

Skyrocketing health care costs are leaving people across the country feeling squeezed. Even with insurance, Americans are often unable to pay what they owe after receiving treatment.

Healthcare continues to be a hot topic, and the rising costs of care are making things even more controversial. In a recent Gallup poll regarding the health care system, 54 percent of respondents said they worry a great deal about the affordability and availability of care. Another Gallup survey reports that last year, a whopping 38 percent of Americans put off needed medical care for themselves or a family member due to cost.

Healthcare Facts & Figures

An article by The Atlantic described the insured-uninsured conundrum this way: “Just because a person is insured, it doesn’t mean he or she can actually afford their doctor, hospital, pharmaceutical, and other medical bills.””

In fact, there are roughly 27.4 million people in the United States right now without health insurance, while more than two of five working-age adults are underinsured. It’s not the availability of care that’s the issue – it’s being able to pay for it. After receiving care, people are crippled by the cost.

With nearly one-third of Americans feeling unable to rely on medical care (let alone being able to afford it), a lot of people have started to take matters into their own hands. Fewer and fewer people today seek preventative care or schedule routine appointments. Without regular check-ups, diseases, conditions, and the severity of diagnoses escalates. By the time medical care is received, the cost of care has virtually spiraled out of control.

Expecting the Unexpected With Healthcare Costs

An unexpected visit to the emergency room can be detrimental to a household budget.

Sarah Kliff, Senior Correspondent at Vox.com, is one of the country’s leading health policy journalists. To make sense of the unpredictable and costly reality of medical expenses, Kliff focused on one thing for a whole year – reviewing patient bills from their emergency room visits. Her laser focus on the ER stemmed from the fact that millions of people visit the emergency room each year, making the ER one of the more frequent ways individuals interact with the healthcare system. She sifted through 1,182 medical bills, and her conclusion was unequivocal. Medical prices are unpredictable – and they are skyrocketing.

Initially, Kliff was most interested in the facility fee. What did it cost to simply walk through the doors of an emergency room? Depending on the hospital and how severe a patient’s case was, she found an ER facility fee could range from as much as $533.00 per visit to as high as $3,000.00.

Of course, no one expects to end up in the ER. And, in general, Kliff found these patients paid the visit for pretty typical ER circumstances, like car accidents, pain from a heart attack, or a ruptured appendix. In one visit from Kliff’s research, a girl had eaten a coin.

But what Kliff also found is that, like the facility fee, the cost of care varied from ER to ER. For instance, in many cases, before a doctor could determine the course of care for a woman, he or she would order a pregnancy test. In one ER in Texas, a pregnancy test cost $236.00. In Illinois, it was $147.00, while in Georgia, the test was $465.00. For perspective, a pregnancy test on Amazon costs about $7.00.

In another example, bacitracin cost an ER patient in Tennessee $1.00, while a patient in Seattle was charged $76.00 for the exact same tube of this common antibiotic ointment.

Since prices aren’t public, patients aren’t aware of the cost – and it isn’t until weeks or months later when the medical bill arrives in the mail that they realize how much they owe.

What Happens When Working Families Can’t Afford Healthcare?

Even working and insured families are having a hard time keeping up with the cost of healthcare. And in reality, the cost burden of insurance premiums is growing faster than income.

In 2018, Kaiser Health News profiled a family earning $100,000 a year. They didn’t experience any major health issues that year and were insured through an employer-sponsored insurance program. Still, they managed to rack up $12,000 in medical debt. The cost of getting sick – even minorly so – is high.

The Federal Reserve Board’s annual report on the Economic Well-Being of U.S. Households found that 37 percent of Americans could not come up with $400 in an emergency without turning to credit cards, family and friends, or selling off possessions. In the world of medical bills, $400 is a drop in the bucket – in most instances, $400 wouldn’t even cover the facility fee upon arriving at the ER, or the pregnancy test if you’re a woman living in Georgia.

Potential Solutions

Despite the scary reality of the situation, there are some solutions to these crippling costs:

• Transparent pricing. When presented with the costs associated with treatment, healthcare consumers are empowered to make informed decisions about their care. Not all, or even most, medical facilities offer transparent pricing, but the rise in consumer concerns is setting the foundation for it to become more popular, and hopefully someday even the norm.
• More urgent care centers. The rising cost of ER visits is one of the primary reasons there have been more urgent centers being built. Simply put, they are a lower cost alternative to hospital visits.
• Policy initiatives. Governmental organizations, think tanks, and other experts continue to develop and champion policy proposals to help curb rising healthcare costs. These initiatives include:
  • Capping commercial hospital prices at 200 percent of the Medicare rate
  • Increasing oversight and regulation of hospital consolidations
  • Reducing prescription drug costs, and reforming the costs associated with services performed in a hospital outpatient treatment center vs. in a surgical center or physicians’ office
• Medical funding. If a patient is unable to pay their medical bills after sustaining a personal injury such as an auto or workplace accident, applying for third-party and non-recourse medical funding can help cover expenses.

Coming Up Next: Why Medical Funding Matters

Amidst the rising costs of healthcare, medical funding is more important now than ever before. The next edition of this two-piece spotlight will answer:

• What is medical funding?
• Why is medical funding becoming a necessary part of personal injury lawsuits?
• What are the benefits to attorneys and plaintiffs of having one company provide medical funding?