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Increasing U.S. Healthcare Costs –Causes behind

The challenge of increasing healthcare costs in the U.S. has been understandable for decades. Various interventions have been attempted, but health costs as a percentage of GDP are forecast to continue to climb. National U.S. healthcare expenditure as a percentage of GDP has risen from 17.2% in 2011 to 17.9% in 2017.


The Accountable Care Act (ACA) of 2010 realigned much of American healthcare compensation and delivery – the assumption was that decentralized, misaligned organizations produced waste and reduced quality. The ACA presented a raft of initiatives designed to address waste and improve productivity, particularly clinical labor productivity. The results of most of these measures, including the ACA’s Accountable Care Organization initiatives (ACOs) remain inconclusive


The major goal for progress in healthcare distribution costs remains the cost of labor. Not necessary that more technology improves labor productivity. Technology can drive rather than retard growth in healthcare costs. According to a Health Affairs (HA) article, “technological changes in the [physician and nursing] sector to date have favored, rather than substituted for, those with high skills". It depends on the numerous types of work or process, on the technology use case, and on the organizational aptitude for accepting new solutions. Administration, management and IT are oft-cited as a source of growing healthcare distribution costs, but these classes of labor may actually be seen as examples to be followed. 


May be Americans have unhealthy lifestyles which have national ramifications for healthcare expenses. In one 2013 study, only 2.7% of the U.S. adult population could be identified with healthy metrics for exercise, diet, smoking, and body fat. As national healthcare expenditures increases towards 20% of GDP, perhaps we should ask whether the challenge of rising healthcare costs can be sufficiently addressed by industry-level restructuring efforts. Perhaps this challenge can better be addressed by bottom-up rather than top-down initiatives.

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