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How Can the United States Reduce Healthcare Costs?

, How Can the United States Reduce Healthcare Costs?

 The United States faces two major problems regarding long-term healthcare costs: 1) a disproportionate portion of the population will soon require more healthcare services as they pass retirement age and 2) a massive healthcare bureaucracy in which large insurance companies (rather than healthcare providers, patients, or the government) determine the market price for many hospital procedures and services. The first problem is physical and immutable: there is no way around the fact that as a result of the baby boom after the Second World War, the huge swell in our population that occurred between 1945 and 1960 is, as of 2013, reaching the age where medical assistance becomes much more common. Compounding these very real problems of supply and increasing demand is the psychological mindset with which many boomers approach healthcare. Unlike subsequent generations which came of age during increasing long-term anxiety over healthcare costs, boomers tend to visit physicians more often and consume more healthcare services, even when adjusted for age.

On a federal administrative level, the Patient Protection and Affordable Care Act of 2010 was designed to address some of these cost issues by obligating employers with more than fifty full-time employees to offer health insurance coverage for their workers. A large part of the Patient Protection and Affordable Care Act also addresses the creation of the Small Business Health Options Program (SHOP), which gives small business owners increased control over comparing healthcare services for their employees. Ideally, SHOP will help in providing small business employers with affordable options, as well as helping employees by providing insurance to meet medical expenses.

The explosion in healthcare costs in recent years has produced a variety of other strategies for employers in both the private and public sectors. Many employers have turned to flexible spending accounts (FSAs) with mixed results. Flexible spending accounts allow employees to make set contributions of their pre-tax income into an account designated specifically for medical expenses. Though FSAs place more healthcare costs directly on the individual and / or family, they also force consumers to become more aware of their medical expenses and encourage all parties to be informed regarding the decision to be treated. Direct employer contribution has been shown to be a more effective option by reducing the overall amount that employees spend on healthcare services.

In other words, when employers help employees meet their healthcare obligations, higher employee satisfaction is reported and net healthcare spending is reduced. In the modern economic climate, where increased healthcare costs on the individual is common, employers are electing to instead hire more part-time employees to circumvent their obligation to provide coverage. It has become difficult to convey the long-term benefits of making an initial financial investment in employees (i.e. affordable healthcare coverage) in order to secure their long-term commitment at a given company.great healthcare plan

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