The Rising Costs of Healthcare: An Analysis of Two Articles

Ben H.

Ben H.

Jun 21, 20232 min read

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The Rising Costs of Healthcare: An Analysis of Two Articles

The healthcare industry in the United States is expected to undergo some major changes in the coming years. According to a recent report, healthcare spending is expected to surpass $7 trillion due to a surge in Medicare enrollment. In addition to this, there is another issue that is threatening the profits of pharmacy benefit managers (PBMs). Drugmakers have been restricting 340B pharmacy sales, which has led to a decrease in profits for these companies. These two articles may seem unrelated at first, but they both highlight the rising costs of healthcare in America.

One of the main reasons for the surge in healthcare spending is the increase in Medicare enrollment. The baby boomer generation is now reaching retirement age, and many of them are enrolling in Medicare. This is leading to a significant increase in healthcare spending, as Medicare is one of the largest payers for healthcare services in the country. As a result, healthcare spending is projected to grow at an average rate of 5.5% per year from 2018 to 2027.

Another factor that is contributing to the rising costs of healthcare is the issue of drugmakers restricting 340B pharmacy sales. This program allows hospitals and clinics that serve low-income and uninsured patients to buy drugs at discounted prices. However, some drug manufacturers have been limiting the availability of these discounted drugs, which has led to a decrease in profits for pharmacy benefit managers (PBMs). This has caused a ripple effect throughout the healthcare industry, as PBMs are responsible for negotiating drug prices on behalf of health plans.

The rising costs of healthcare have significant implications for patients, healthcare providers, and payers. Patients may experience increased out-of-pocket costs for healthcare services, while providers may struggle to keep up with the demand for services. Payers, including Medicare and private insurance companies, may need to adjust their coverage and reimbursement policies to account for the increased spending.

In conclusion, the healthcare industry in the United States is facing significant challenges due to rising costs. The surge in Medicare enrollment and the issue of drugmakers restricting 340B pharmacy sales are just two examples of the many factors that are contributing to this trend. As healthcare spending continues to grow, it is important for policymakers, healthcare providers, and payers to work together to find solutions that can improve the affordability and accessibility of healthcare services for all Americans.

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