While the health care debate rages on, many Americans have the wrong idea as to what is driving health care premiums. Health care costs are rising faster than the overall economy, wages and general consumer prices. However, the belief that increases due to excess insurer profits, the aging of America and the high cost of medical malpractice are the blame for the failing health care system are wrong and unfounded.
According to a recent report about what was causing the increase in healthcare premiums, key drivers of health care premium increases are in fact advances in medical technology, the high cost of regulatory compliance and patient lifestyles. Patient lifestyles include prescriptions such as sleeping pills that used to not be regularly prescribed.
The report also shows that both defensive medicine and medical malpractice have little impact on insurance costs. For example, diagnostic testing contributed only .2 percent to the increase in health care costs in 2007. Additionally, premiums for liability coverage and defensive medicine contribute to health spending at any moment in time but are not considered a recent significant factor in overall growth of health care spending. Therefore, research shows that medical malpractice is not currently driving the rate of increase in individual premiums. To read the full report about the costs of healthcare, click here.