catapult magazine

catapult magazine


Escalading Costs of Health Care


Oct 26 2005
04:09 pm

The cost of health care is sky-rocketing. But why? Can someone help me understand where the money is going?

Having recently graduated, I had to take out temporary health insurance. So I researched health insurance. Actually, I found it to be relatively affordable, but I have nothing really to compare it to.

One article I found may reveal one source of increasing costs. The article noted that people used to think of health insurance more along the lines of auto insurance. With your car you don’t go in for every ding or scratch, or ask the insurance company to pay for your oil changes. Similarly, people didn’t used to go in for every cold or flu symptom. Medical insurance was intended for unexpected catastrophies, some serious illness or accident. People didn’t file for routine health checkups. There were more clinics and people paid out of pocket if they felt they had to go in for more minor disorders. Why did people change their thinking about insurance? The article suggests that medical insurance companies, in order to gain greater profits, began telling customers they deserved more complete health care. More visits, more profit for them. “Let us negotiate with your doctors, and we’ll get you a better deal.” A better deal is now costing more and more money, but insurance companies are happy.

I don’t know how big a factor this shift is (or if it is a real factor), but I can hear my grandmother saying, “We never went in for that. We took care of it ourselves.” The recent HSA (Health Savings Account) seems to be a way of turning back the clock by giving people the option of paying out-of-pocket once again for minor disorders (from their tax-deductible savings account) and being covered for major illnesses/accidents.

What are other sources? What is the main source of rising costs? Other factors I’ve heard about are costs of medical malpractice insurance for doctors (frivolous lawsuits), care for the aged, and coverage for the ininsured. But I don’t know how big these factors are, or if there are other major factors.