Healthcare Costs Continue To Outpace Overall Inflation

The healthcare system in the US is a mess when compared with most developed countries. Some may question whether the healthcare system is even a “system” since the system is made of a hodgepodge of actors such as thousands of healthcare companies, regulators, medical providers, billing firms, pharmaceutical firms and many others. As a result of this chaotic setup inefficiency, cost over-runs, huge amounts of unwanted paper-work, billing errors, legal issues, unnecessary procedures performed on patients, etc. are the norm. Hence healthcare is one of the very industries which defies the laws of capitalism as prices continue to skyrocket and competition is non-existent.Consumers of healthcare aka patients are also a vast disadvantage as the prices many items such as various medical procedures, consultations, lab tests, etc. are not known before so that they make informed decisions. The various actors in the industry have a strong incentive to maintain the status quo as opposed to making any meaningful improvements to the system. Hence healthcare costs continue to soar and outpace overall inflation for many years now with no end in sight as shown in the chart below:

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Via: A presentation titled Health Care Reform: Implications for the Property/Casualty Insurance Industry by Steven N. Weisbart, Ph.D., CLU, Senior Vice President & Chief Economist. Insurance Information Institute, Trenton, NJ

Update:

Workers’ Health Premiums Rose 63% in 7 Years

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