Affordable Healthcare Access Threatened by Rising Costs, S&P Global Report Reveals

TL/DR –

A new report from S&P Global Ratings suggests that access to affordable healthcare services is becoming increasingly difficult for both insured and uninsured Americans. The US spends more on healthcare services than any other country, with individuals expected to pay an average of $6,159 annually by 2023 and ancillary costs accounting for roughly 6% of average annual income before taxes. The report warns that if cost pressures continue to mount, healthcare providers may have to make difficult decisions about the services they offer and where they offer them.

Dive Brief:

• Access to affordable healthcare services in the U.S is becoming increasingly challenging for both insured and uninsured citizens, reveals a new report from S&P Global Ratings.
• The U.S tops worldwide healthcare expenditure, and by 2023, average annual out-of-pocket healthcare expenses could reach $6,159, with additional costs accounting for 6% of the average pre-tax income.
• The report suggests that ongoing cost pressures could further escalate healthcare spending, potentially compelling providers to make difficult decisions about service provision.

Dive Insight:

The U.S is grappling with high healthcare costs, significantly exceeding other nations. For instance, the 2023 per capita healthcare spend was $13,942, almost 40% more than the next highest spender, Switzerland, as per a KFF-Peterson tracker.

Despite the Affordable Care Act of 2010 and other endeavors to curb costs, the persistence of high expenses can be attributed to a convoluted payer-payee system, ownership structures in healthcare, and inflation of labor and technology costs.

Increased healthcare costs loom if Medicaid enrolment declines and provider reimbursements decrease due to proposed federal legislation.

Republicans aim to cut Medicaid funding and freeze provider tax programs, restricting states’ capacity to finance Medicaid reimbursements for providers.

Decreased margins or lower patient visits could negatively impact providers’ credit ratings. Nonprofit health systems and those heavily reliant on government payers are likely to feel the most significant effects of these proposed changes.

Anticipated challenges may force providers to limit services, be more selective about patients or regions served, or increase service costs. Such measures could “generally constrain access and affordability of care,” warns the report.

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