Increase in Healthcare Cost in 1965
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Cause for Rise in Healthcare Cost since 1965
The main cause of the rise in cost of care after 1965 was the establishment of the Medicare and Medicaid programs. It led to increased access to care by people who are old, poor, and the very young. Given that the packages are subsidized by the federal government, most of the cost was shifted to the government (Lemley, 2022). The increased access by a population that is more predisposed to poor health outcomes and an initial inability to access services led to a surge in care seeking behavior.
There was also the development of moral hazard where the practitioners and the patients would prefer for the latest testing and management approaches even when there lacks evidence to support implementation. It led to the establishment of bundled care systems especially in the management of chronic disease.
Measures to Reduce the Cost
The main approaches in reducing the cost has been the presence of oversight functions to confirm the services offered as well as costs that should not be covered due to the contribution of the provider. For instance, lack of compensation for practitioners whose actions has led to increased cost in treatment such as development of pressure sores that could have been avoided (Starr, 2018).
The federal government has also ensured that there is a set-up that allows bundled care systems. Bundled care provides room for the standardization of care provided as well as the cost. There is adherence to evidence-based care practices and the maintenance of a constant cost as agreed upon with the provider.
References
Lemley, D. E. (2022). Twentieth Century Evolution of American Medical Business Interests: Insurance, Funding, and the Seeds of Federal Managed Care. In Too Conscientious: The Evolution of Ethical Challenges to Professionalism in the American Medical Marketplace (pp. 25-34). Springer, Cham.
Starr, P. (2018). Rebounding with Medicare: reform and counterreform in American health policy. Journal of Health Politics, Policy and Law, 43(4), 707-730.