Rising Healthcare Cost

What are some of the driving forces behind rising health care spending? One of the main reasons for health care is Americans are aging becoming sicker due to being overweight. We also pay our medical professionals for doing more but not for doing their job correctly. People are also wanting the latest medical developments before they are proven to be beneficial causing the prices to rise quickly. We are not taking care of ourselves properly and are wanting quick fixes to our health problems instead of changing our habits. This makes doctors to be used more and more medications dispensed which all cause the cost to rise.

How do HMOs affect health care costs? HMO’s try to get their insured clients to use preventive care to increase their health. They require them to need an authorization to utilize specialists. Thus trying to keep cost down while having the insured person pay copays for services they receive. This can cause problems with people feeling like they are not getting the care they need immediately but it does keep the cost down which is a goal for HMO’s.

What key functions and incentives of HMOs affect costs? One of the incentives is to stay within the network of providers to keep cost down for the insured. If you step outside it then you will possibly have to pay 100% of the cost on your own with no help from your HMO. They try to keep you with your primary care provider so they can control what services the insured receives. That is due in part to the HMO requiring a referral for services the primary care doctor does not provide. By using the primary care doctor to regulate what services are being rendered they can keep cost down for the HMO while still serving the insured person.

References:

http://www.kaiserhealthnews.org/stories/2012/october/25/health-care-costs.aspx

http://www.hschange.com/CONTENT/54/

http://www.tc.umn.edu/~paren010/HMO_3_Incentives%20in%20HMOs.pdf