Rising Cost of Healthcare Due to COVID-19
By: Karla Hernandez
(Credit: EpicTop10, www.epictop10.com)
The continued financial hardships due to the COVID-19 pandemic highlight the question of its effect on health care costs on Americans. The pandemic continues to overwhelm the U.S. health care system, causing U.S. health care costs and prescription medication prices to rise exponentially. With over 48% of Americans taking at least 1 prescription drug, the cost of prescription drugs may soon be the next public health crisis during the COVID-19 pandemic (Garling, 2020).
Research conducted in partnership between Gallup and West Health, finds that Americans are sensitive to negative developments as result of the COVID-19 pandemic. According to a Gallup poll, nearly nine in ten U.S. adults are “very” (55%) or “somewhat” (33%) concerned that the health care industry will leverage the COVID-19 pandemic to raise drug prices (Wittters, 2020). The new challenges for individuals and the health care system could increase annual costs in the United States between $30 billion and $65 billion due to the COVID-19 pandemic.
Rising costs in the health care system in 2020 has been attributed to the growing strain of the cost of treating patients with COVID-19 on hospitals, as well as considerable appointment cancellations and routine checkups for many patients. Due to considerable appointment cancellations, routine checkups the impact on patients and the health care system due to COVID-19 will be substantial. For example, the average cost of treating a patient with chronic pulmonary disease has the potential to increase by between 7 and 11 percent and go from approximately $38,000 per patient per year to approximately $41,000 per patient per year (Coe, 2020). High healthcare costs put pressure on an already strained fiscal situation. Containing our rising health care costs is important for our nation’s long-term fiscal and economic well-being.
The healthcare industry is already witnessing a dramatic increase in pharmaceutical prices due to COVID-19. According to researchers, pharmaceutical prices could be one of the biggest drivers of medical- cost trends for the upcoming year. More than 100 drug makers are working on developing a COVID-19 vaccine and treatments for the coronavirus that could become available by early 2021. As more companies focus on developing treatments and vaccines that are effective in combating against coronavirus, their production in other prescription medication began to decline. Which causes a decrease in supply of medication for many patients, and an increase in prices. Currently in the U.S., the average cost of medication and prescription drugs is around $1,200 per year for patients. As more companies seek government funding to develop treatments and vaccines for COVID-19, the most basic of medication will see a continuous increase in price as the U.S. healthcare system is exhausted by the coronavirus pandemic.
It’s worth noting that, although the COVID-19 pandemic has had a significant effect on the cost of health care, health care costs have been rising for the past 20 years. Prices are a significant driver of healthcare spending in the United States; the cost of healthcare services has grown faster than the cost of other goods and services in the economy. In the past 20 years, the Consumer Price Index (CPI)( the change in prices paid by urban consumers for various goods and services), has grown annually at an average of 2.1 percent while the CPI for medical health care has grown at an average 3.5 percent per year (Peter G Foundation, 2020). There are many possible reasons for increase in health care prices over the course of 20 years. One being the introduction of innovative healthcare technology. Other being the complexity of the U.S. healthcare system can lead to waste in the insurance and provider payment systems. As well as lack of competition and healthcare monopolies that give companies the opportunity to increase prices. However, more research needs to be done to fully confirm the reasons for substantial increase in health care prices over a short period of time.
The continued community spread of COVID-19 will continue to have negative implications on the U.S. economy and the U.S. healthcare system. The continuous 20-year old trend of rising health care costs coupled with the strain of the COVID-19 pandemic will overwhelm Americans. To make it worse the lack of control of the pandemic by the U.S. government will result in economic destruction, and price increases. Therefore, as one health crisis ends, the United States will soon face a health price crisis.
The continued financial hardships due to the COVID-19 pandemic highlight the question of its effect on health care costs on Americans. The pandemic continues to overwhelm the U.S. health care system, causing U.S. health care costs and prescription medication prices to rise exponentially. With over 48% of Americans taking at least 1 prescription drug, the cost of prescription drugs may soon be the next public health crisis during the COVID-19 pandemic (Garling, 2020).
Research conducted in partnership between Gallup and West Health, finds that Americans are sensitive to negative developments as result of the COVID-19 pandemic. According to a Gallup poll, nearly nine in ten U.S. adults are “very” (55%) or “somewhat” (33%) concerned that the health care industry will leverage the COVID-19 pandemic to raise drug prices (Wittters, 2020). The new challenges for individuals and the health care system could increase annual costs in the United States between $30 billion and $65 billion due to the COVID-19 pandemic.
Rising costs in the health care system in 2020 has been attributed to the growing strain of the cost of treating patients with COVID-19 on hospitals, as well as considerable appointment cancellations and routine checkups for many patients. Due to considerable appointment cancellations, routine checkups the impact on patients and the health care system due to COVID-19 will be substantial. For example, the average cost of treating a patient with chronic pulmonary disease has the potential to increase by between 7 and 11 percent and go from approximately $38,000 per patient per year to approximately $41,000 per patient per year (Coe, 2020). High healthcare costs put pressure on an already strained fiscal situation. Containing our rising health care costs is important for our nation’s long-term fiscal and economic well-being.
The healthcare industry is already witnessing a dramatic increase in pharmaceutical prices due to COVID-19. According to researchers, pharmaceutical prices could be one of the biggest drivers of medical- cost trends for the upcoming year. More than 100 drug makers are working on developing a COVID-19 vaccine and treatments for the coronavirus that could become available by early 2021. As more companies focus on developing treatments and vaccines that are effective in combating against coronavirus, their production in other prescription medication began to decline. Which causes a decrease in supply of medication for many patients, and an increase in prices. Currently in the U.S., the average cost of medication and prescription drugs is around $1,200 per year for patients. As more companies seek government funding to develop treatments and vaccines for COVID-19, the most basic of medication will see a continuous increase in price as the U.S. healthcare system is exhausted by the coronavirus pandemic.
It’s worth noting that, although the COVID-19 pandemic has had a significant effect on the cost of health care, health care costs have been rising for the past 20 years. Prices are a significant driver of healthcare spending in the United States; the cost of healthcare services has grown faster than the cost of other goods and services in the economy. In the past 20 years, the Consumer Price Index (CPI)( the change in prices paid by urban consumers for various goods and services), has grown annually at an average of 2.1 percent while the CPI for medical health care has grown at an average 3.5 percent per year (Peter G Foundation, 2020). There are many possible reasons for increase in health care prices over the course of 20 years. One being the introduction of innovative healthcare technology. Other being the complexity of the U.S. healthcare system can lead to waste in the insurance and provider payment systems. As well as lack of competition and healthcare monopolies that give companies the opportunity to increase prices. However, more research needs to be done to fully confirm the reasons for substantial increase in health care prices over a short period of time.
The continued community spread of COVID-19 will continue to have negative implications on the U.S. economy and the U.S. healthcare system. The continuous 20-year old trend of rising health care costs coupled with the strain of the COVID-19 pandemic will overwhelm Americans. To make it worse the lack of control of the pandemic by the U.S. government will result in economic destruction, and price increases. Therefore, as one health crisis ends, the United States will soon face a health price crisis.