The cost of healthcare is continually rising. In fact, U.S. healthcare spending is estimated to hit $6.2 trillion by 2028. Consumers are frightened and quick to place blame. Much of this blame is landing on physicians and insurance companies. While all facets of healthcare play a role in its cost, physicians and insurance companies aren’t the main culprits.
If Not Doctors, Then What?
The truth is that there is not one single factor making healthcare more expensive. Culprits include (but are not limited to) technology, administrative expenses, pharmaceutical costs, and lifestyle choices.
New technology is vastly improving healthcare equipment, but of course, it’s not free. Modern medicine has seen countless new successful diagnoses and treatments, much of which can be attributed to advancements in technology. Technology is vital for the progression of society, and there are millions of healthy people today that would not be healthy without it, but is it possible for tech to go too far? According to an article in Missouri Medicine, there are “few requirements that effectiveness be demonstrated before technologies are used broadly and concern that their application tends to go beyond those patients likely to benefit the most from them.” In other words, healthcare facilities are quick to adopt new, expensive technology that may be unnecessary.
Administrative costs make up an estimated 21% of excess U.S. spending on healthcare. A large portion of these administrative expenses is made up of product design and marketing. Healthcare facilities that advertise more and charge more per procedure are not necessarily higher quality than facilities that don’t receive a lot of media attention. Often, part of the reason you are paying top dollar for highly advertised facilities is to cover their marketing costs, not because you are receiving superior care. Think brand name products vs. generic equivalents.
Rising pharmaceutical costs are one of the most significant contributors to the overall rise of healthcare expenses. Pharmaceutical companies primarily make their money through patents.* If a pharmaceutical company is the only one that offers a drug, they can charge consumers as much as they want—and they do. For instance, a 2018 study estimated that one vial of insulin costs between $3-$4 to produce, and yet one vial of insulin can cost up to $250. However, once a drug patent ends (patents usually end after a certain number of years) the drug becomes open source, meaning anyone who is FDA-certified can create the same drug. Once drugs become open source, other drug manufacturers realize just how much the original, patented company is overcharging. They sell the exact same drug for a much lower price, driving up competition in the market. These lower-priced drugs are generic drugs (as opposed to patented, name-branded drugs) and they are just as effective as their expensive counterparts. Purchasing generic medications whenever possible will significantly reduce your healthcare costs. Call MotivHealth’s pharmacy team (385-247-1030) to see if you can receive your medication at a lower cost.
An increasingly unhealthy America is contributing to increasingly expensive healthcare nationwide. Poor lifestyle choices such as smoking (including e-cigarettes), lack of exercise, and unhealthy diets lead to more doctor visits. The obesity epidemic even forces healthcare facilities to purchase equipment that can accommodate more weight. This is a burdensome expense that reflects in every patient’s bill—even those who are treated with less expensive equipment. The more that people on a particular insurance plan visit the doctor, the higher the premiums rise each year.High-deductible insurance plans can provide some relief from this issue as they allow consumers to pay for actual care received and less for “what-if costs.” MotivHealth also offers a Steps Program that pays members $1 toward their HSA for every day they walk 8,000 steps or more, up to 20 days per month. (Hot tip: This incentive can be doubled through spousal participation, and MotivHealth also offers a $10 holiday incentive in December, meaning that your family can earn $500 per year just from steps!) There’s nothing more motivating than money, and you’ll be amazed at the health benefits that result simply from walking.
Is There Anything We Can Do to Stop Rising Costs?
High-Deductible Health Savings Plans
The good news is that if you are a MotivHealth member with an HSA, you’re already on the right track because your employer chose a high-deductible insurance plan. As mentioned previously, high-deductible plans allow members to save their money for actual medical expenses, rather than “what-if” expenses. People who pay high monthly premiums are pouring money into medical treatment that they might never need. By empowering members to make smarter healthcare decisions, MotivHealth’s premiums increase by less than 2% per year—we are dedicated to keeping healthcare dollars in your pocket.
If your employer has chosen a high-deductible plan with an HSA, you hold the potential to make healthcare even more affordable. Health savings accounts provide a triple-tax advantage: tax-free contributions, growth, and withdrawals. When healthcare expenses arise, you can use your HSA to pay for them tax free. Additionally, any savings that are not used toward healthcare costs can be invested. And, once you turn 65, HSA funds can be used toward non-medical expenses (although they are taxed when used for these purposes). To learn how to fully maximize your HSA, click here.
Hot Tip: When you cash-pay (pay in advance or on the day of service) medical providers are very likely to offer you a discount. If you are on one of our HSA-eligible plans and you undergo a particularly expensive procedure and can’t afford to pay up front, MotivHealth has a loan program: MotivAdvance. (link to MotivAdvance video) MotivAdvance offers a consumer loan which MotivHealth issues to cover SmartPay-eligible procedures when members are unable to pay in advance or on the day of service. Learn more here.
The Price Transparency Initiative
As you know, there are numerous factors that contribute to rising healthcare costs, and “better quality” is not one of them. That’s why MotivHealth created SmartPay— MotivHealth has always made price transparency a priority, and we want our members to receive high-quality care at lower costs. Price transparency means that you get to see the cost of healthcare before you pay—no surprise bills nine months down the road. You deserve to know your cost options before choosing a healthcare provider or receiving care because your choices affect your healthcare costs. Take action. Call our personal health assistants (844-234-4472) available 24/7/365 to find high-quality care at the lowest price.
New Healthcare Laws Taking Effect in 2022
While MotivHealth has always been ahead in the price transparency initiative, the rest of the nation is finally being pushed to be more transparent as well. Set to take effect on January 1st, 2022 is the No Surprise Act. As its name suggests, the No Surprise Act targets surprise bills. Under the No Surprise Act, patients that receive emergency services from out-of-network providers will only be required to pay the deductibles and copayments that they would have paid for service from in-network providers. Also under the No Surprise Act, patients that receive non-emergency services from out-of-network providers at in-network facilities will, in most cases, only be responsible to cover their in-network cost-sharing amounts.
The Affordable Care Act (ACA) passed in 2010 required that hospitals publish a list of standard charges for all given services. More recently, under the Trump administration, the Centers for Medicare and Medicaid Services (CMS) began issuing rules about what needed to be done to meet the ACA pricing transparency rules. If all goes to plan, then by January 1st, 2023, insurers will be required to make rates for common services available to consumers. In the meantime, by July, 2022, insurers will be required to publish:
- Negotiated rates for all covered items and services
- Negotiated rates and historical net prices for all covered prescription drugs
- Historical payments and billed charges from out-of-network providers
- Medical cost estimates.
MotivHealth Is Here to Help
We know that it can be difficult to navigate healthcare. There are so many complexities that lead to price variation and excess spending, and no one wants to think about that—especially if they are sick or injured. That’s why MotivHealth strives to simplify and change healthcare.
We want you to call us! (844-234-4472) We look forward to your calls. We view our members as people, not numbers—our goal is to solve healthcare, not to raise premiums.
*To be clear, pharmaceutical companies are not the enemy. They spend billions of dollars researching medications that patents help them recoup their costs on. Even so, generic drug are more affordable and should be used whenever possible.
“The Case for Drug Pricing Reform–the Cost of Inaction”
The Commonwealth Fund
“Drivers of Healthcare Costs”
“Insulin Prices: How Much Does Insulin Cost?”
“Why U.S. Healthcare Spending Is Rising So Fast”