There are several reasons for increase in health insurance premium in USA. Advanced and efficient medical tools are invented in recent years. These instruments are routinely used for diagnosis or treatment. Scientific publications suggest newer medical tools provide more accurate diagnosis and better outcome of treatment. Cost of medical investigation and treatment using such equipment has risen steeply over the last 25 years. The modern medical investigations and therapies are reliable and expensive.
Why Health Insurance Premium is Increasing in USA?
There are several factors that play a role in the increasing health insurance premium in USA. Some of the reasons include:
Demand for Better Care
Elderly apprehensive patients demand better care, which stresses need for additional test or when in doubt to repeat the same test. In many cases patient prefers second opinion and consult alternative physician. The second or alternative physician may repeat the tests if previous test results are not available at the time of initial or follow up consultation. Duplicate lab and interventional diagnostic test causes additional expenses for health insurance provider. Patient pays annual premium for coverage of private health insurance. The health insurance premium periodically increases with increased demand for additional test and advanced treatment.
Advanced and Expensive Radiological and Lab Investigations
Cost of radiological studies such as MRI, PET scan and CT scan has increased periodically over last several years because of higher cost of modern equipment, salary of technician and physician fee. The microscopic lab study of tissue biopsy is a most important lab investigation to establish a clinical diagnosis. Biopsy of internal organ involves minor or major surgical procedures. Most of the surgical procedures for biopsy are done as an endoscopy. Endoscopy is a procedure performed using long tubular camera. Interventional endoscopic study and biopsy are performed in hospital or outpatient surgery. Endoscopic studies such as gastroscopy, colonoscopy, bronchoscopy and cystoscopy are performed under sedation. The cost of interventional studies includes anesthesia, fee for surgical center, surgeon's fee and cost of microscopic lab study of biopsy material.
The other expensive recent advanced investigations and treatment are cardiac catheterization, echocardiography, 24 hours cardiac Holt's monitoring, stent placement, dialysis and nerve conduction studies. The advanced treatment such as robotic surgery, cardiac stent placement and vascular surgeries are expensive and necessitates special center. The equipment such as robot and invasive cameras are expensive and need frequent replacement as well as servicing. The disposable kit is often custom designed for the equipment and procedure, which results in higher cost.
Overtreatment of Symptoms
The frequent ER visits and admission in hospital for recurrent symptoms and chronic illnesses results in repetition of investigations and multiple referrals to specialist. One of the causes of multiple investigation and referral to specialist is to avoid liabilities and errors in diagnosis. The over all stay in hospital is prolonged to accomplished final diagnosis and treatment.
Liabilities and Standard of Practice
Physician's professional and clinical behavior is monitored and assessed by hospital advisory board or hospital privilege committee. The standard set by hospital privilege committee, licensing board, the medical societies and malpractice insurance provider monitors physician practice behavior. The institutions demands higher standard of practice and near zero errors. Such performance demand often directs evidence based practice and documentation of objective findings supporting clinical diagnosis. The objective findings are obtained through radiological and lab studies. Plaintiff and defense attorney establishes legal dispute of management of illnesses around the objective findings. Expert witnesses testimony is also guided by objective finding observed in several investigational studies. Standard of practice and medical malpractice is established depending on objective evidence of lab and radiological studies. Patients are also holding physician liable for wrong or inaccurate diagnosis. Investigational studies like X-Ray, CT Scan, MRI, Blood Examinations, Biopsy and other studies are routinely performed before scheduling any treatment. The wrong diagnosis and treatment results in legal dispute and liability. Physicians will not conclude diagnosis unless supported by objective findings observed in radiological or lab results. Physicians are often forced to use expensive diagnostic test and treatment.
Increased Life Expectancy
Wealthy countries are seeing increased life expectancy and demand for advanced newer treatment. Over the past several years average life expectancy is increased by 10 to 15 years in USA. Middle age and elderly population are expecting physician to do all required test during annual test, evaluate symptoms and diagnosed chronic diseases. Patient expects all investigation and treatment to be approved by insurance provider as recommended by the treating physician.
Hospitals are also held liable for wrong diagnosis and treatment. Policy administrators and hospital executives are now heavily endorsing and encouraging treating physicians to perform necessary advanced lab test and interventional investigations procedures to justify reason for hospital admission and inpatient treatment. Hospitals are mostly self-insured. Patient suffering with chronic illnesses are often brought to hospital for diagnosis and treatment. Few cases could have been treated through physician's office. The spouses, siblings and relatives demand hospital stay because of fear and difficulties in managing patient at home.
For Profit Private Insurance Company
For profit health insurance companies are under pressure by investors to declare profit every year. Private health insurance premium is gradually increasing over past several years to cover the cost of treatment and also to show profit. The gradual increase in payout for physician and hospital services as well as employee salary and bonuses has decreased the profit of medical health insurance provider. Medical health Insurance providers are responsible to pay for all lab tests and treatments after copays and deductibles. The cost of the investigational studies and advanced medical treatment are often enormous. The cost is obviously transferred with increase of medical insurance premium.
Non-Profit Private Insurance Company
Non-profit insurance companies like Blue Cross Blue Shield are privately owned and managed. Blue Cross Blue Shield or BCBS and similar other insurance provider are facing same issues as for profit insurance companies. The physician fee, hospital charges, employee salaries, bonuses etc leads to enormous cost. At the end of year if there is deficit then the insurance premium for following year goes up.
Non-Profit Government Insurance Company
Medicare is managed by federal government and Medicaid by state government. The increase payout results in either increase of federal or state tax or elimination other federal or state services.