As most people know, it can be expensive to be sick these days and many times paying off medical bills can lead to all sorts of financial problems.
In fact, 60% of bankruptcies in the United States are the result of high medical bills, according to findings released by BestHealthcareMBA.com.
The report shows that three-fourths of those bankruptcies that were associated with medical bills are filed by folks who have health insurance through their jobs or through other sources -- not the uninsured millions you might expect.
But it's not just being sick that gets expensive. Staying well isn't cheap either.
To give you an idea of what Americans are spending to be well these days, $1 out of every $6 is spent on healthcare, the report shows, and in 2012 the total amount spent by U.S. residents on healthcare was $2.8 trillion dollars. By 2016, that number is expected to swell to $3.5 trillion.
Not really necessary?
Maybe the saddest part of all of this is that much of the money spent on healthcare costs is for procedures that weren’t truly necessary, as $210 billion is spent annually on procedures that were only performed because providers were scared of medical liability, one recent study estimated.
And each year hospitals overcharge U.S. residents about $10 billion and once you add in all the other unnecessary costs, the total reaches to about $765 billion in wasted healthcare spending.
In 2009, when Americans started to see the first signs of the economic downturn, insurance companies saw a 56% increase in profits, and around that time, a total of 2.7 million Americans couldn’t afford coverage at all and went without it.
Those people working for smaller companies didn't fare much better, as small business owners saw an 180% increase in insurance premiums between 1999 and 2009, and of course those higher costs were passed on to the employees.
Another expense that’s passed on to folks — and ultimately paid through taxes — is themoney healthcare lobbyists spend each year.
The report shows there are three Washington D.C. lobbyists for every member of Congress, which equates to 1,546 lobbyists in total, and when those lobbyists fought the healthcare reform bill in 2010, $390 was spent every second.
When it comes to prescription drug costs, there has been an 89% increase since 2000, but the good news is that within the last 6 years, those costs have only gone up about 5.7%.
So how do these high costs affect people’s ability to seek out care when they need it?
According to results from the Kentucky Health Issues Poll, 64% of insured people in that state said they’ve put off care because it would be too costly. Out of the people who weren't insured, 88% said the same thing.
And which companies saw the biggest rise in profits since 2010, and benefited the most from these higher costs?
Some include the United Health Group and Humana, which recorded 11% and 9% profit increases respectively; of the medical facilities that raked it in, HCA Holdings garnered 104% more in profits, Universal Health Services 73%, Davita 18% and Pfizer 21%.
In 2003, health researchers Peter Hussey, Gerard Anderson, Uwe Reinhardt and Varduhi Petroyan did a study on healthcare costs around the world, and said the United States spends buckets of money on healthcare, without matching those increases with more services.
“The United States spends more on healthcare than any of the other OECD countries spend without providing more services than the other countries do,” the researchers wrote. “This suggests that the difference in spending is mostly attributable to higher prices of goods and services.”
Furthermore, Anderson says that other countries go about negotiating rates with its providers differently than the U.S., which contributes dramatically to America’s high healthcare costs.
“Other countries negotiate very aggressively with the providers and set rates that are much lower than we do,” he said.
Tom Sackville, director of The International Federation of Health Plans, told the Washington Post that at the end of it all, much of the rising healthcare costs are all about people getting the chance to pad their pockets.
“In my view, health is a business in the United States in quite a different way than it is elsewhere,” he said. “It’s very much something people make money out of. There isn’t too much embarrassment about that compared to Europe and elsewhere.”