Here's the answer to my earlier question that no-one answered.
The highest factors in our rising healthcare costs in roughly decending order:
#1)
Hospitals and doctors. Doctors and hospitals account for by far the largest share, 52 percent in 2006, of all national health spending. There's abundant evidence that some of that spending is unnecessary. Under the present system, hospitals and doctors earn more money by doing costly interventions than by keeping people healthy. And more medical care doesn't necessarily mean better care, according to research on Medicare expenditures by the Dartmouth Medical School's Institute for Health Policy and Clinical Practice.
#2)
Drug companies. Prescription drugs account for only one-tenth of total health-care expenditures. But drug spending has increased as a share of overall expenditures over the past decade.
#3)
Insurance companies. Health-insurance premiums have grown faster than inflation or workers' earnings over the past decade, in parallel with the equally rapid rise in overall health costs. Industry spending on administrative and marketing costs, plus profits, consumes 12 percent of private-insurance premiums.
#4)
Politicians and government regulators. Although the government directly controls only 46 percent of national health spending, many of its policies affect the bottom line of the health-care industry, for example, by setting Medicare reimbursement rates for doctors on which private insurers base their rates, or by regulating health insurance. Between 1999 and 2006, the health-care lobby spent more than any other business sector, according to a study by the Institute for Health & Socio-Economic Policy, a nonprofit policy and research group.
#5)
Lawyers. Malpractice-insurance premiums and liability awards account for less than 2 percent of overall health-care spending, according to a 2004 study by the Congressional Budget Office. Defensive medicine, the practice of ordering extra tests or procedures to protect against lawsuits, might add another few percentage points, according to some estimates.
#6)
Health-care consumers. "Modifiable" risk factors, such as eating too much, exercising too little, or smoking, are to blame for an estimated 25 percent of U.S. health-care costs, according to expert estimates. But even if every American took up healthful living overnight, our health-care expenses would still be the second highest in the world (after Luxembourg).
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