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Healthcare Spending in the U.S.

In 2017, healthcare spending constituted 17.9% of GDP in the United States. That works out to almost $3.5 trillion dollars in a single year. Over the past 20 years healthcare spending as a percentage of GDP increased over 4.5% (it was 13.3% of GDP on 1997).

The sheer scale of healthcare expenditure can be challenging to wrap your head around. So, if we look at spending per capita the costs hit home a bit more. In 2007, health spending per capita in the U.S. was $7,627. By 2017, that number increased by almost 40% to $10,739.

There are typically three types of out of pocket (OOP) costs in the healthcare industry:

  • Co-payments: A set fee that patients pay for each covered visit, e.g. $20 for each GP visit.
  • Co-insurance: A set rate for healthcare services that splits the costs between patients and insurance, e.g. patient pays 20% of coverage and the insurer covers the other 80%.
  • Deductibles: A set threshold that patients are responsible for paying before insurance will start to cover services, e.g. a patient with a $2,500 deductible will pay that much out of pocket, but once they cross that threshold insurance will cover their remaining costs.


What’s happened in the past ten years is that more people are enrolled in deductible (and increasingly high deductible) plans. This means that many are paying more OOP on an annual basis.

All this means is that as a country Americans spend a lot of money on healthcare. Unfortunately, these cost increases often create challenges for both healthcare providers and patients.

Challenges for Healthcare Providers

Obviously, one of the major problems that healthcare providers experience with increased healthcare costs is that patients have trouble paying them. That also results in more administrative work for providers. Back office processes are frequently inefficient, overly complex, and time consuming. All these factors contribute to a cyclical dynamic that leads to higher costs for providers.

Because of healthcare cost increases for patients, many people delay care until it’s absolutely necessary. This tactic may save people money in the short term, but it also leads to more complex medical diagnoses, which require increased services, which costs more money, that patients struggle to pay.

If we’re being realistic, the machinery of the healthcare industry is too big for any single provider to change it. But that doesn’t mean providers can’t take proactive steps to mitigate or reduce the effects of these cost increases on their own bottom lines.

Proactive Solutions

While it may seem daunting to disrupt established procedures and protocols, streamlining the administrative side of things gives healthcare providers an opportunity to realize real savings. This means identifying bottlenecks, redundancies, and inefficiencies, and providing solutions to address those things.

At the same time, making it easier for patients to pay their bills means they’re more likely to do so. This means providers won’t have to sink as many resources into costly collections schemes that yield poor returns.

Fortunately, the Raxia platform helps providers address both of these issues. Raxia works behind the scenes to streamline backend processes, carrying them out automatically. It also leverages digital communications to ensure timely and cost-effective delivery of information to patients. In other words, Raxia automatically generates collections information and sends it to patient in a way that is easy to understand.

On top of the sheer improvement in efficiency and communications, Raxia can offer payment plans to patients, based on established criteria, that makes it easier for patients to tackle the cost of medical care. As a result, providers see an increase in total collections and decrease in the time it takes to collect those payments.


For more information about Raxia and how it can help your practice navigate the complex world of healthcare spending and collections, contact us today.

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