Health care is expanding at a rapid pace—and it’s something that’s never going away. A 2017 study published in JAMA found that from 1996 to 2013, healthcare spending increased by $933.7 billion. People will always need medical care, and sometimes it comes unexpectedly, or in a big way—as we saw with the COVID-19 pandemic.
It’s no secret that health care is a growing industry, but why exactly is it expanding? There are many reasons and contributing factors that have resulted in the surge of the healthcare field. Here are five reasons the healthcare industry is growing in the United States.
People Are Living Longer
The average life expectancy has been steadily increasing for decades, and it doesn’t appear to be declining anytime soon. (Notably, there was a slight decrease in 2020, which may have been related to the COVID-19 pandemic. But for reference, in 1970, the average life expectancy was about 70.36 years, while in 2020, it was 78.81 years [down slightly from 2015, at which time it was 78.81 years]).
The 2017 JAMA study found that aging of the population accounted for 11.6%, or $135.7 billion, of the healthcare spending increase.
An increasing life expectancy also means that older people make up a greater share of the population. According to the World Health Organization (WHO), “The number and proportion of people aged 60 years and older in the population is increasing. In 2019, the number of people aged 60 years and older was 1 billion. This number will increase to 1.4 billion by 2030 and 2.1 billion by 2050. This increase is occurring at an unprecedented pace and will accelerate in coming decades, particularly in developing countries.”
If people are living longer, they will inevitably require more doctor’s visits. Even if they had no unexpected medical issues or illnesses, a person who lives to be 78 years old will have more routine visits to the doctor than someone who lives to be 70 years old.
Of course, the more years someone is alive, the higher the odds they will use health care at some point. And with increasing age comes increasing risks of certain medical issues, including heart disease, orthopedic surgery, cancer, and more.
Per the WHO, “Ageing presents both challenges and opportunities. It will increase demand for primary health care and long-term care, require a larger and better trained workforce and intensify the need for physical and social environments to be made more age-friendly. Yet, these investments can enable the many contributions of older people—whether it be within their family, to their local community (e.g. as volunteers or within the formal or informal workforce) or to society more broadly. Societies that adapt to this changing demographic and invest in healthy ageing can enable individuals to live both longer and healthier lives and for societies to reap the dividends.”
Not only are people living to an older age—there are more people than ever before.
Of note, the growth rate of the population is on the decline and has been since 2015 is still growing. Per the Census, from April 2010 to December 2019, the population increased 19.5 million (6.3%), with an average annual growth between July 2010 and July 2019 of 0.66%. In the preceding decade, the average annual growth was 0.97%.
According to the JAMA study, the increase in population made up nearly a quarter of the increase in healthcare spending (23.1%; $269.5 billion).
Not only is the population increasing—the population of older people is increasing.
The U.S. Census estimates that by 2060, one in every four Americans will be aged 65 years and older. A significant factor here is the aging Baby Boomer population. By the year 2030, all Baby Boomers will be aged older than 65 years. More older patients needing medical care means more growth in health care.
One outcome of the COVID-19 pandemic that many people hope is here to stay is the use of telemedicine.
In March 2020, when compared to the same time period in 2019, telemedicine visits increased by 154%, according to the Centers for Disease Control and Prevention (CDC).
“With expanded access and improved reimbursement policies in place, as well as ongoing acceptability by patients and health care providers, [telemedicine] might continue to serve as an important modality for delivering care during and after the pandemic,” the CDC noted.
However, the use of telemedicine is not without its downsides, including disparities in access.
A study published in JAMA in December 2020 identified factors associated with a lower likelihood of telemedicine use. Risk factors for lower odds of having completed telemedicine visits were:
- Older age
- Asian race
- Non-English as the patient’s preferred language
- Medicaid insurance
Similarly, the following factors were correlated with lower odds of video use for telemedicine visits:
- Older age
- Female sex
- Black race
- Latinx ethnicity
- Lower household income
The researchers concluded, “As we build our telemedical health system, which is likely here to stay, a new ‘normal’ must prioritize the needs of those who have been historically marginalized to ensure that health equity is achieved.”
Affordable Care Act
Commonly referred to as “Obamacare,” the Affordable Care Act (ACA) expanded insurance access for many Americans. As a result of the ACA, the rate of uninsured Americans went down significantly, meaning more people had access to health care.
Also under the ACA, health insurance companies can no longer deny patients who have preexisting conditions. This means that people who need to use health care the most are still able to obtain coverage and can receive medical treatment.
Health care has expanded largely due to new advances in technology, new drugs, and more.
Artificial intelligence, three-dimensional imaging, smart phones, smart watches/fitness trackers, improved orthopedic technology, and robotic-assisted surgery and care are just a few of the latest developments to change the way we use health care.