America’s healthcare costs are in deep crisis

SUMMARY: The media loves to blame pharma companies for high healthcare costs, but unless we start to invest in healthy lifestyles, we’re headed for a healthcare crisis the likes of which we have never experienced.

The media have targeted pharmaceutical companies for a long time because sensational headlines lead to clicks. Forget the fact that prescription drugs only account for $.10 of every healthcare dollar spent and that hospital chains are raking in cash with PBM’s and insurers we love to place blame.

Millennials now make up the largest share of the U.S. population and labor force, placing them at the heart of U.S. economic growth as consumers, workers, and business owners. But Millennials are seeing their health decline faster than the previous generation as they age. This extends to both physical health conditions, such as hypertension and high cholesterol, and behavioral health conditions, such as major depression and hyperactivity. Without intervention, millennials could feasibly see mortality rates climb up by more than 40% compared to Gen-Xers at the same age.

This means higher healthcare costs. Millennial accelerated declines will result in greater demand for treatment and higher healthcare costs in the years ahead. Under the most adverse scenario, millennial treatment costs are projected to be as much as 33% higher than Gen-Xers experienced at a comparable age.

Poorer health among millennials will keep them from contributing as much to the economy as they otherwise would, manifesting itself through higher unemployment and slower income growth. Under the most adverse set of projections, lower levels of health alone could cost millennials more than $4,500 per year in real per-capita income compared to similarly aged Gen-Xers. Such impacts would be most likely concentrated in areas already struggling economically, potentially exacerbating instances of income inequality and contributing to a vicious cycle of even greater prevalence of behavioral and physical health conditions.

Blue Cross Blue Shield

The logical first consequence of these overall health declines is an increase in the amount of treatment that will need to be accessed. This, of course, is not without cost. A rapid increase in the need for treatment for the most populous generation in the U.S. has the potential to tax our already burdened healthcare infrastructure. The U.S. already spends more than 18% of its GDP on healthcare expenditures, the highest in the developed world. These additional cost pressures would be borne not only by consumers and businesses but by states and the federal government as well, adding to already mounting mandatory spending burdens.


The explanation of why is actually quite simple. Healthcare providers make more money treating poor health than preventing it. Where is the ROI for a company to promote exercise and healthy diets?

There are some companies, however, that are trying to reduce employee health costs. The average cost of employer-provided health insurance in 2019, including employee contributions and out-of-pocket costs, would reach nearly $15,000. Employer healthcare costs per employee will be about 70 percent of that total, or some $10,400 per worker.

Some companies are encouraging employees to exercise with incentives

According to one estimate, Americans may spend anywhere from $75 billion to $575 billion less than expected on health care this year. Another actuarial firm projects that self-insured employers may see a 4% reduction in their employees’ health costs this year.

Harvard Business Review states “business leaders, especially the CEO, need to make it a priority to understand the health care benefits business. Employee health benefits consume more than $15 million annually per 1,000 employees, and employers should treat costs with the same rigor and expertise that they assess other major expenses. Whether it’s through their broker, insurance company, or consultants, businesses should examine these costs closely and understand where they are deviating from benchmarks and why. A car manufacturer should not overpay for care any more than it overpays for steel”.

What is Pharma’s responsibility?

Aye, that’s the question! The FDA could require all pharma product websites to add general health prevention information and links to credible online health information. Information and guidelines on diet and exercise are always changing, and having content written by experts could influence some people to start down the path to change.

When I was the digital marketing person for depression, we included some information on how to fight depression written by a thought leader that was very well received and among the viewed pages on the website.

DTC marketers know that people are coming to their websites but what they’re missing is that people also want and need updated and credible health information on how to treat diseases.

Healthcare leaders need to prioritize prevention. We’re running out of time.

America’s healthcare costs are in deep crisis