Skyrocketing health insurance rates blamed on higher price of medical care

Health insurance plan

Cost of Health Insurance

Rising costs from hospitals and other providers increase spending throughout downturn.

Recent research is now showing that the heightened prices that were charged by outpatient centers, hospitals, and other healthcare providers were responsible for sending the cost of health insurance upward at twice the rate of inflation throughout the recession and economic struggle to recover.

This was the case even as there was less consumption overall of medical care by patients.

According to a Health Care Cost Institute report, In the case of outpatient surgery, emergency room visits, substance abuse care, and facility-based mental health, the price of this care increased at nearly five times the rate of the overall inflation from 2009 to 2010. That organization is a nonpartisan research group which receives its funding from insurers.

The only category that experienced a decline (by 3.2 percent in the cost per admission) was nursing home care.

On the other hand, children’s medical care was among the categories with the fastest increase in spending. According to the chair of the governing board at the Health Care Cost Institute, Martin Gaynor, who is also a Carnegie Mellon University health care economist, “The story really does seem to be prices.”

This study provides one of the most extensive looks at the actual payments made by health insurance companies for claims. The findings now brings forward certain questions regarding the annual cost of healthcare in the country, which currently totals approximately $2.6 trillion.

Among these questions are:

• What is causing the medical service prices to rise so much more quickly than inflation?

• Is this skyrocketing spending on children a long-term trend that will have significant future cost implications, or was it merely an anomaly during that time period?

Gaynor explained the importance of these questions by stating that “If you don’t know what the cause is, you don’t know what the right policy lever is (for a solution).” He also explained that the one year old Health Care Cost Institute will be examining many of those questions much more deeply by performing additional research in the near future.

The Institute was founded in 2011 in order to help to make more health insurance industry payment information more accessible to the public.


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