Life is expensive! Healthcare is one of our highest costs, and here in Washington, it’s gotten particularly bad. So, the state Insurance Commissioner’s Office recently reported to the folks in Olympia about what's happening and why. This is good info for us to know! Let's take a look!
Here are Five Fast Facts about soaring health care costs in WA state:
- 📈 What’s Happened - In the last 10 years, the cost of employer-based health insurance premiums have gone up about 49%!!! Individual plans have more than doubled. Even before the pandemic, health care costs were rising about twice as fast as inflation. Only 6% of Washingtonians don’t have coverage (which is great!) but these rising costs are hitting everyone hard (which is not great!).
- 😲 The Real World Impacts - Survey results from last year show how these increases have caused nearly 66% of Washingtonians to “delay, minimize, or skip” getting medical treatments. Over 80% said future health care costs were a concern. (Because they’re not stupid, right?)
- 💡 The Likely Cause - The Insurance Commissioner’s Office report pinned the bulk of the blame on mergers and acquisitions - fewer companies taking control over huge chunks of the industry. Historically, this almost always drives up prices and reduces quality for both patients and workers.
- 🤝 M&A Madness - In 1986, just 10% of the hospitals in the state belonged to large multi-hospital systems. In July 2022, a whopping 40% of hospitals belonged to just five major systems, with another 15% belonging to smaller multi-hospital systems. Over that time, the overall number of hospital beds per 100k people was cut almost in half, while the proportion of beds in hospital systems went from 19% to 73%. Sixty-five percent of the physicians across the state are employed by just eight systems. That’s more consolidation than a gambler going all in on a final hand of poker!
- 🤔 Added Elements - In recent years, private equity firms have also begun acquiring ownership in health care-related companies. This particular report doesn’t comment on the impact to outcomes, but it does point to dozens of other studies that show private-equity ownership also drives up costs and reduces quality. Yaaaay…
🔥Bottom line: This is a huge problem, and it’s not going to get any better unless the state does something to prevent even more consolidation. If it costs more and results in worse outcomes, why in the world would this practice be allowed to continue?
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