Personal Finance 1st Edition by Jack R. Kapoor

Exercise 6

1 What are the reasons for rising health care expenditures?

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2 What are various groups doing to curb the high costs of health care?

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3 What can individuals do to reduce health care costs?

Action Application Create a list of personal actions that you can take to reduce the costs of health care.

Step 1 of 3

1) Reasons for rising health care expenditure:

Following are the reasons for rising health care expenditure:

• Use of expensive and sophisticated technologies.

• Repetition and duplication of same tests and duplication of same technologies which yields same result.

• Increasing variety of treatment and frequency of treatment which includes tests that are unnecessary.

• Increase in the number of elderly people and longevity of their lives.

• Increasing medical emergency, due to increase in crime rate and number of accidents.

• Work rules with restriction and competition is limited in the health care delivery system.

• It requires intensive labor and rapid growth in the average salary of the health care executives and professionals.

• More expensive medical care’s are used which are unnecessary like going for an emergency room in case of very slight fever.

• In the health care delivery system, there is a build-in-inflation.

• More health care services are used by aging baby boomers.

• Other factors which raise the health care expenses are administrative waste, double health care, fraud, insurance malpractice, a wider range of prices for the similar services and more expensive surgical procedures.