Health Care: Costs and Inequality

No one denies that modern health care is expensive, but what factors contribute to the rising cost?

Of course, continually advancing technology provides the most obvious and perhaps greatest cause. Innovations in all forms of medical equipment, surgical techniques, and therapies are costly on their own, but also require specialists to operate them, or additional training for existing specialists. Patients, with more access to information about new technology through the Internet and other sources, expect the latest technology in their own treatment. Research and physician demands to use new techniques to explore all possibilities in patient care fuel this expectation.

The rising cost of physician care provides the next most significant contributor to rising medical costs. As technologies have increased so have the numbers of, types of, and demands for specialists. Specialists generally charge more for services than general practitioners, family practitioners, or internal medicine practitioners. Surgeons, radiologists, and endocrinologists earn as much as $80,000 more per year than a general practitioner. Cardiologists, gynecologists, and anesthesiologists earn approximately $30,000 more per year. Some specialists, such as pathologists, oncologists, and pediatricians, actually earn less than general practitioners. Even so, physicians, as a group, are in the top 1‐percent income bracket, with incomes that consistently remain ahead of inflation.

Another contributor to rising health‐care costs is malpractice insurance. From the 1980s to the 1990s, the cost of malpractice insurance doubled or tripled, depending upon the specialty, and most specialists pay higher rates.

The availability of newer, more expensive drugs, particularly newer antibiotics and drug treatments for AIDS patients, also contribute substantially to rising costs. Some of these medications may cost more than a hundred dollars for a single dose. The cost of medicine has become a public policy issue and a social problem as people forgo medication to pay for food and housing; this is especially true among those elderly who do not have prescription medicine coverage.