Profits for insurance companies and drug companies are skyrocketing. Data from CMS (2013 and 2014) are tabulated below. The big finding is the cost of healthcare is going up much faster than inflation. And, the lack of regulation is allowing insurance companies and drug companies to gouge consumers in the US.
Between 2013 and 2014 prescription drugs increased by 9.8% and net insurance cost (i.e. profit) increased by 12.1%. If life expectancy was going up at the same rate it would be a good deal — but, that’s not happening.
Despite the complexity there are rather simple solutions.
- Limit insurance company profits (these are not healthcare providers — these are paper shufflers!).
- Inform prescribers which drugs are cost effective. That means expanding FDA oversight or starting a new agency less influenced by industry lobbying.
- Limit drug company profits to 7% like most other developed countries.
The table below lists the expenditures for various categories of health care. The figures are in millions of dollars. The total expenditures for US healthcare in 2014 were over 3 trillion dollars.
Spreadsheet: US Healthcare Costs 2014