Average life spans are rising, and so is health care spending. However, longevity does not play a significant role to the spending increase as much as people might think. According to several studies, technology is the culprit as to why we spend so much for health services.
American lives three years longer today, reaching the sipe age of 79, compared in 1995. But research suggests that living longer itself isn’t a big contributor of rising health care spending. Since the baby boom generation is so large, the average age in the US would rise even if life expectancy didn’t.
Because of the increasing senior citizens, health care spending increases from older people since they need more medical care. Those 65 to 74 spend two times as much compared to the working age bracket of 19 to 64. Those 75 to 84 spend four times as much, while those 85 and older spend six times as much, the The New York Times says.
Also, health care cost and spending grow faster for retirees than for younger Americans. But the real reason behind the rapid increase in prices of health care is technology. Each year, health care technology improves but always with a higher cost.
According to the Houston Chronicle , technology change contributes for at least one-thirds and as much as two-thirds of per capita health care spending growth. Some health care machines and technology assists people in living longer. It's better care, but it's high-priced.
Moreover, advancing technology has long been identified as the driving force behind rising health care costs. In 2000, government researchers found that it accounted for half the increase in per capita cost growth for many decades. Part of the reason for the rise of health care spending is that patients don't directly compare prices of procedures, and insurance companies don't determine if a particular procedure is actually needed, resulting to a lot of needless spending.