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Technology & Increased Medical Costs

While the country’s economy has been on the way up for the past few years. But the great recession of 2008 and 2009 threw many families into financial spirals, and many of them have yet to turn things around. Research into bankruptcies have found that sudden medical emergencies (and the accompanying bills) are one of the key reasons why many families face debt that they cannot pay back. Anyone who has dealt with a medical emergency or knows a loved one who has, likely understands this reality. Medical costs are staggering. Even with insurance, the bills often mount quickly. It is not uncommon for middle-class families to be unable to pay those costs.

It wasn’t always this way. Medical bills in the past, while often a stress on families, were nowhere near as staggering as they are today.

What changed over the years? If you believe political talk of certain big interests, you might believe that medical malpractice lawsuits are to blame. However, virtually every credible source on the issue acknowledges that this is nothing but a red herring. It is incredibly harmful and inappropriate to blame injured medical patients for rising healthcare costs.

Instead we need honest evaluations of the situation to figure out how things got where they are today. A recent CNN story on the cost of childbirth provides one unique glimpse into the issue. The story explains how one man was shocked to find the hospital bill for his own birth in 1947. Even after a six-day hospital stay, use of the operating room, nursing services, medications, and more the total bill was only $70. That figure is eye-popping to those of us today who are used to spending significantly more for all medical services.

More Than Inflation
Is inflation to blame for the rising costs. Not really. $70 in 1947 is the same as about $726 in 2012 dollars. But according to a recent report fromt the American Congress of Gynecologists and Obstetricians, an uncomplicated childbirth today costs about $11,000. If the delivery occurs via C-section, then the bill is $19,000. And this refers to a mother staying only a day or two after the birth–not five or six like in 1947. In other words, inflation accounts for only a fraction of the increase over the years. Something else is at play.

Technological developments are likely a significant cause of that increase. Medical advances over the years have worked wonders to help save lives. For example, in 1950 around 3 in every 100 children died shortly after their birth. Today that number is only .64 of every 100. In other words, medical care during childbirth is far better than in the past. The improved care, however, comes at a cost. The creation and use of the equipment and skills is expensive. That expense undoubtedly plays a role in steady rise of costs.

Of course, it is far too simplistic to suggest that technology alone is the cause of the rising healthcare costs. Insurance practices, complex/hidden billing arrangements, failure to receive preventative care, and other issues are undoubtedly at play as well. In addition, improved safety standards may also come with significant financial costs. If fewer complications develop then patients need less care overall–cutting back on costs.

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