Celebrating 75 Years:

Fast-forward to 2008

Sadly, healthcare access and escalating costs are still major social issues today. The number of Americans without health insurance coverage was 47 million, or 15.8 percent, in 2006 (the latest statistics available). The healthcare crisis is a ubiquitous topic in the news media and center stage in this year’s presidential election.

Just how much have costs increased in the past 75 years? Let’s take the cost for a vaginal birth as an example. In December 1933, America's first "Blue Cross Baby" was born in Durham, North Carolina. The entire cost of her delivery and her mother's 10-day hospital stay totaled $60. The equivalent of this amount in 2006 dollars would be about $933. Today, the average cost of a routine vaginal delivery is approximately $6,040 (based on PacificSource paid claims from January 2007 through July 2007). While the actual cost of these services can vary greatly based on many factors, this example shows an increase of more than 600 percent.  

A variety of factors contribute to this cost escalation. New developments in prescription drugs and new technology in healthcare services probably have the largest impact. Rapid advancements produce new, more effective diagnostic tools and treatments—at higher costs. That, in turn, produces a wave among the other contributing factors. As Medicare reduces reimbursement rates, providers shift their costs to insurance companies and patients to compensate. Malpractice insurance premiums for physicians have increased dramatically. And there are now more laws than ever dictating how health plans must do business. 

How PacificSource is Addressing Cost Issues >

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