What are some of the reasons for increased healthcare costs attributable to the providers of medical care?

What are some of the reasons for increased healthcare costs attributable to the providers of medical care?



• Providers in many instances set their own charges, which are higher than what the same charges would be under free-market conditions.

• Providers are in a position to induce demand for services, leading to higher utilization than what is necessary. Many of the procedures performed are medically unnecessary.

• Providers have done little to promote healthy lifestyles and the prevention of disease because they have mainly espoused the medical model for healthcare delivery.

• Because of legal risks, providers have engaged in the practice of defensive medicine to protect themselves against potential malpractice lawsuits.

• Small area variations suggest that physicians can vary widely in their medical decision making and use of healthcare resources. Scarce medical resources are wasted when they are inappropriately used.



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