Dive Brief:
It is becoming more difficult for insured and uninsured Americans to access affordable healthcare services, according to a new report from S&P Global Ratings.
The United States spends more on healthcare services than any other country by any metric, according to the report. As of 2023, an individual could expect average out-of-pocket annual healthcare costs to run them an average of $6,159 annually and ancillary costs to account for approximately 6% of their average annual income before taxes.
Efforts to rein in healthcare spending thus far have been mixed, and recent cost pressures could cause costs to climb further still, according to the report. Should headwinds continue, providers may be forced to make tough choices about what services they offer and where.
Dive Insight:
High healthcare costs are a longstanding issue in America. Nationwide, the country paid $13,942 per capita on healthcare in 2023 — nearly 40% more than the second highest spending country, Switzerland, and 82% more than the comparable country average, according to a KFF-Peterson tracker.
Despite efforts to make healthcare more affordable, including passing the Affordable Care Act in 2010, costs have proved sticky, due to a complex payer-payee system, healthcare ownership structures and cost inflation, including of labor and technology.
Healthcare costs could continue to climb if Medicaid enrollment decreases and reimbursement to providers falls due to proposed federal legislation, according to the report.
Republicans have proposed slashing the Medicaid program and freezing provider tax programs at current rates, limiting states’ ability to fund Medicaid reimbursement for providers.
In such a scenario, providers could experience negative credit rating impacts through decreased margins or lower patient visits. Nonprofit health systems and those that that rely heavily on government payers for a significant portion of revenue are most likely to be impacted by the proposed changes, according to the report.
Providers may have to decrease the number of services offered, be more selective about the patients or geographies they serve, or increase the cost of services in the face of headwinds, the report warned.
“These measures generally constrain access and affordability of care,” the report said. “In other words, what may be good for preserving or improving financial performance and credit quality may not always align with the objective of increased access to affordable care.”
