Topic Paper – Week 2

A BRIFE REPORT ABOUT MEDICAL COST AND RESOLUTIONS

Submitted by

Rong Hu

Prepared for

David Barch
BUSN 6120, Managerial Economics
Fall 1, 2015
Webster University

August 30 2015

CERTIFICATE OF AUTHORSHIP: I certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.

____Rong Hu____________________08/30/2015 Signature Date

Abstract

This topic paper is a brief report about medical cost trend and suggested resolutions. Medical costs have risen faster than other consumer costs over the past decade. In this report, there will be three parts: 1. Medical cost in last decade. 2. Impact of higher medical cost. 3. How to reduce medical cost.
The report will utilize indifference curve analysis to demonstrate how the cost changes have impacted the Senator's constituents.

Key words: higher medical cost, indifference curve analysis, impact.

1. Medical cost in last decade

The medical cost in U.S. increases by about 112% within last 10 years [1]. It is one of two fastest growing costs. Another one is tuition [2]. Sadly we as students are affected by both. The figure 1 shows the medical cost increase in last decade [1]. Although the rate of increase has slowed, the rate of the medical cost increase still significantly outpaces the general rate of inflation.
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Fig. 1 The medical cost increase in last 10 years [1]

Not only the rate of the increase in the medical cost is high, but the absolute medical cost in U.S is much higher than other western countries. Figure 2 Health expenditures per capita.
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