According to CNN, healthcare costs have skyrocketed within nearly a decade. Healthcare spending for households increased by 8% in 2014 versus 5.7% nine years ago (2005).
The article goes on to state that American consumers spend 18% of their incomes on healthcare alone, and it would come as no surprise if this figure increased in the upcoming years, given the large out-of-pocket deductibles, coinsurance, and copayments Americans have to shell out.
Are medical devices to be blamed for this increase? Yes and no. Surprisingly, contrary to common belief, medical device expenditure is slowly growing compared to rapid increases in the medical and general consumer index.
Read on to learn how medical devices could actually help to reduce the overall cost of healthcare.
What Some Think
Some believe medical devices are to blame for rising healthcare costs. To be fair, medical technology is being used more in the healthcare industry.
Providers may use several medical devices on patients in a single visit. This may give some cause for concern: logically speaking, the more medical devices used in healthcare, the more money hospitals (and then patients) have to shell out for these devices.
The Reality is Grayer
Still, healthcare costs aren’t that straightforward, as an AdvaMed report shows. Contrary to this line of thinking, the report concludes that medical devices are actually “a relatively small and slow growing expenditure” in the healthcare industry.
The study further indicates that since 1989 to 2010, the overall costs have only gone up from 5.3% to 6%.
This less-than-a-point increase is slower than the Medicare Consumer Index (4.1%) and general Consumer Price Index (2.4%).
The study shows that the rising healthcare cost is complicated, and that no single factor is responsible for its increase. (In fact, we’ll discuss later how medical devices can help reduce healthcare costs.)
Other Reasons for High Costs
Other than speculation on medical devices being a contributing factor for healthcare costs, other factors come into play. For one, admin costs from both sides—insurance companies and hospital billing—contribute to the steep costs.
Also, medical prices don’t have to be reasonable. Price, in fact, isn’t based on what’s fair; it’s based on what the market will allow—in other words, what customers are willing to spend.
Since most patients need specific prescriptions, procedures, and check-ups, these aren’t costs, unfortunately, most patients can afford to forgo.
Which means providers can take advantage and charge more because they can, not because they should. Then you have the pharmaceutical costs for medications, which can be as much as several thousands of dollars a pill.
Using loopholes—like the US patent system giving drug creators the right to sell the new drug for a certain amount of time because it will spur on new drug discoveries—pharmaceutical companies can defend their steep prices.
There Is Some Truth, And How It Can Lead to Lower Healthcare Costs
Still, medical devices can be expensive. However, there’s hope. Hospitals can cut healthcare costs by revising how medical devices are shipped and stored.
Surprisingly, according to this article, inadequate shipping and storage measures may be to blame why medical devices can be expensive.
Hospitals can work with manufacturers and distributors to create a better cost-effective, streamlined process for shipping and storing inventory.
These cost-effective solutions can then be passed down to the consumer’s bill, which then should be more affordable than before. In other words, better shipping and storing methods of these devices can yield cost-effective results.
Medical Devices: A More Energy Efficient Solution
According to this article, hospitals are one of the biggest energy consumers in the US. To cut down on steep energy costs, the Hospital Energy Alliance (HEA) zoned in on medical devices as being one of the energy efficient solutions.
Manufacturers have created such devices, which have allowed hospitals to conserve electricity and water among other resources without affecting the patient experience.
Certain CT scanners, for instance, run 75% faster, which means less energy is wasted. Sterilizers and instrument washers have features in place that allow them to conserve more water. MRI scanners are lighter and energy efficient so less power is exerted.
It’s safe to say that we will see more energy efficient medical devices in the future, which will only lower energy costs and, hopefully, help provide patients a reduced medical bill.
What the Next Steps Are
Still, some manufacturers and distributors do take advantage and sell devices beyond the reasonable price.
Which is why, according to a Forbes article, the FDA could solve this problem by making price information transparent so consumers can decide for themselves what medical route to take.
It would work like this. The FDA would make it mandatory for new devices to be tested against devices that are already in the medical field. The pricing and value would be measured from these tests. And, lo and behold, the information would be publically available.
These steps are necessary because, a lot of times, consumers are at the mercy of medical facilities. It’s not like a restaurant where consumers can pick and choose their courses, or decide not to go to the restaurant altogether.
Transparency is the key to give consumers that choice. This will also ensure that companies in the medical field price their items competitively (and reasonably).
Adjustments can be made so patients pay less in the healthcare sector. Many believe that medical devices are to blame for the hike, however, as an AdvaMed report shows, they are still a slowly growing expenditure.
Still, providers, manufacturers, and distributors can work together to come up with cost-effective shipping and storage methods so medical devices are cheaper.
Nonetheless, medical devices offer energy-efficient solutions, which help medical facilities cut down on energy and water costs.
The healthcare industry can lower costs even more by improving administrative solutions and providing pricing transparency.
What other ways can medical devices pave the way for lowered healthcare costs? Comment below!