Alliance for Health Reform: Cost Drivers in Health Care

This issue brief from the Alliance for Health Reform, prepared by Health Policy Alternatives, describes some of the primary cost drivers in U.S. health care.  The issue brief identifies the following as the primary drivers for health care costs:

  • Aggregate national demographic and economic factors: per capita income, age, disease prevalence
  • Determinants of health of individuals and societies: individual characteristics (genetics) and personal behaviors, the physical environment in which individuals live and work, the social and economic environment in the community
  • Health system demand-side issues: the prevalence of insurance coverage, insurance coverage shortfalls, information gaps in health care
  • Health system supply-side issues: overall supply and mix of services, the development, diffusion, and pricing of new technology

All these factors are in turn influenced by systemic, cross-cutting issues:

  • Marketplace structures
  • Payment incentives driving volume, especially of higher cost services
  • Fragmented delivery and financing systems
  • Insufficient evidence-base on multiple aspects of care and costs
  • Regulatory issues
  • Quality and safety
  • Malpractice litigation risks

Link to Original Source

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