The negative consequences of rising costs include:
1. Less money available for other uses and investments. Individuals feel it. So do employers, and government. In good and hard times, healthcare is a complicated thing to pay for. Employers struggle to pay for employee benefits. Governments are still trying to find the right mix of benefits, incentives, costs, and reforms. Organizations like Intermountain are watching closely to make sure that policymakers keep in mind the important work of nonprofit hospitals.
2. Cost-shifting. The various sectors of American healthcare are linked to each other so that pressures applied to one part of the system affect the other parts. Cost shifting is an example. Most frequently, this happens when public payers decide to cut their reimbursements to healthcare providers. Those providers have to make up the shortfall either through productivity increases or by shifting the cost burden to private payers. Similarly, as employers see their healthcare costs increase, many shift more of the costs to employees through higher insurance co-pays and deductibles.
3. Rationing. When payers reach the limit of what they're able to pay—and when providers aren't compensated—rationing in some form usually occurs. Employers cut benefits, choose more closely managed health plans, or drop health insurance altogether. Government makes program cuts. Providers are forced to cut back on services. Doctors and hospitals find their revenues shrinking and their expenses rising.