Why Healthcare Costs Continue to Increase in the U.S.

For years, skyrocketing healthcare costs have become an overwhelming and burdensome challenge, impacting individuals, families, and businesses. As a nation, we are consumed by the complexities of our healthcare system. This includes insurance hurdles and expenses surrounding affordable access to healthcare. Going forward, it’s worthwhile for employers and individuals to understand the key factors contributing to escalating costs and take time to explore viable alternatives.

During the past several years, a promising solution known as Direct Primary Care (DPC) has gained traction. This model aims to address the root causes of rising healthcare expenses by facilitating access to primary care physicians at an affordable cost. This article delves into the driving forces behind the increasing cost of healthcare and highlights how DPC can emerge as a sustainable solution…and why we should take notice.

Factors Driving Healthcare Costs

Administrative Overhead: The administrative process is a major reason why healthcare costs have become inflated. Doctors rely heavily on skilled staff to facilitate the all too often challenging payment process with insurance companies. The traditional fee-for-service model is antiquated and offers complexities surrounding billing, paperwork, and compliance requirements. The costs associated with administration and staffing to manage this process are unavoidably passed on to patients, increasing the financial strain on individuals and the entire healthcare system. As an example, with 70,000 procedure codes, properly coding an office visit has become extremely burdensome and has made it difficult for physicians to receive payment from insurance companies, resulting in what is known as bad debt. This is not only driving doctors out of primary care but also driving up costs of care because of the billing complexities insurance carriers have implemented to deny claims.

Fragmented Care Delivery: According to the National Bureau of Economic Research, care fragmentation occurs when the delivery of health care is spread across an excessively large number of poorly coordinated providers. This lack of coordination is a potentially important source of inefficiency in the U.S. healthcare system. Because most healthcare professionals do not have a shared electronic health record platform, it results in frustration for the patient as the need for repetitive procedures causes them to incur additional costs and can compromise patient outcomes. A streamlined and integrated approach is crucial to address these inefficiencies.

High Prescription Drug Prices: In 2022, overall pharmaceutical expenditures in the U.S. grew by 9.4% compared to 2021, for a total of $633.5 billion according to the National Library of Medicine. These exorbitant prices, driven by factors such as research and development costs, utilization, and new drugs contribute significantly to the overall cost of healthcare. As a result, patients often find themselves saddled by the financial strain of essential medications.

Defensive Medicine: Defensive medicine is widespread and is utilized by physicians who seek to protect themselves against malpractice lawsuits. This, unfortunately, has consequences for patients and doctors while, at the same time, impacting overall healthcare costs. Fear of lawsuits prompts healthcare providers to practice defensive medicine, ordering additional or unnecessary tests, prescribing medication at higher doses, overtreating patients with antibiotics, or avoiding high-risk patients and procedures altogether to safeguard against potential legal action. While this approach may offer a degree of protection, it adds unnecessary costs to the healthcare system and truly undermines the patient-physician trust.

Chronic Disease Epidemic: The increasing prevalence of chronic diseases places a substantial financial strain on the healthcare system. Managing conditions like diabetes, hypertension, and obesity requires ongoing care, medications, and lifestyle interventions, contributing to long-term healthcare expenditures. Many chronic illnesses can lead to cancer and even death, and health professionals need to play a vital role in supporting those struggling with chronic diseases. To do so, physicians need to be afforded the time to truly evaluate a patient and their lifestyle. Unfortunately, the current fractured healthcare system does not allow for those intimate relationships. Visits to the doctor have become a revolving door as doctors rush through patient after patient daily. This can lead to misdiagnosis, overmedication, or worse, a lack of a meaningful doctor-patient relationship.

Direct Primary Care as a Solution

As a direct primary care member, you develop a close relationship with a doctor who is familiar with your medical history. There is no longer a need to schedule appointments months in advance; your DPC doctor is easily accessible. If an in-person visit is required, you can typically secure an appointment within days. Ideally, your doctor will proactively manage your health, conduct preventive tests, diagnose illnesses, and prescribe medications.

DPC providers can sidestep the need to prepare and submit insurance paperwork, enabling them to conduct more comprehensive visits and dedicate additional time to you. Unlike practices that accept insurance and often manage larger patient loads, DPC practices treat fewer individuals. This affords providers the luxury of delving into the intricacies of their health history, paving the way for more personalized and attentive care.

Lastly, research indicates that individuals with direct primary care providers experience improved health outcomes, such as reduced hospitalizations, more effective blood pressure control, and better management of diabetes.

In conclusion, the shift to direct primary care emerges as a compelling solution to the challenges in healthcare. By fostering a more personalized, accessible, and preventative approach, DPC not only addresses the immediate needs of patients but also sets the stage for a transformative and sustainable future in healthcare. As we embrace this innovative model, we move closer to a healthcare system where the emphasis is on individual well-being, fostering healthier communities one patient at a time.