Health Care Cost

Health care costs in the United States (US) currently exceed 17% of GDP and continue to rise. Other developed nations spend less of their GDP on health care but have the same increasing trend. Factors contributing to this rise are not hard to find, such as the development of new treatments and the age increase of the baby boomers. Unfortunately, instead of focusing on the costs of treating individual patients with specific medical conditions over their full cycle of care, providers aggregate and analyse costs at the specialty or service department level.
Making things worse, health care system participants do not even agree on what they mean by costs. When politicians and policy makers talk about cost reduction and “bending the cost curve,”
But with that will come some big costs. The IMS Institute for Healthcare Informatics expects cancer treatment costs to hit $150 billion by 2020, up from $107 billion in 2015. The “Cancer Business” has become so big that large companies are dedicated to developing cancer treatments with price control often taking a backseat. For example, pharmaceutical giant Novartis just split out its oncology business into a separate branch from its other disease areas. Cancer is a complicated disease that requires a whole web of decision-making, which ultimately leads to higher costs of cancer treatment. (Ramsey, 2016)
A 2011 study in the Journal of the National Cancer Institute determined the 2010 total cost of all cancer care in the US was $124.5 billion. The researchers projected the total cost would rise to $157.7 billion by 2020. The projected cost increase, stratified by phase of treatment (initial, continuing, and last), is displayed in the table below (Elkins,
For example, one group assessed costs of general treatment in a Medicare population that has advanced stage epithelial ovarian cancer and found that there was a significant difference in costs depending on severity of disease when comparing two different treatments: primary debunking surgery and neo-adjuvant chemotherapy (Forde, Chang, Ziogas, Tewari, & Bristow, 2015). Specifically, primary debunking surgery was 12% more expensive than neo-adjuvant chemotherapy amongst stage IV patients, in which the median cost in 2010-adjusted dollars was $63,131 and $55,302, respectively. In contrast, stage III patients had a median cost of $59,801 when treated with primary debunking surgery and a median cost of $59,905 when treated with neo-adjuvant chemotherapy. Cost in this context was defined as the sum of reimbursed claims for inpatient, outpatient, physician/supplier, durable medical equipment, home health care, and hospice claims for a period of 7 months after the diagnosis for ovarian