Free Essay

Health Care Spending

In: Other Topics

Submitted By msmartin
Words 1097
Pages 5
Health Care spending is on a raised emotional and physical. Health care spending is concerning the United States economy is healthcare system. The majority countries the healthcare system in the United States is not public, meaning that the state does not provide free or despicable healthcare services. However other countries Canada and Great Britain, for example, the government funds healthcare providers through taxes. The United States being a profoundly capitalistic country for another route and passed the burden of healthcare spending on private consumers as well as other institutions such as employers, insurers, etc. Everything would have been fine unless statistics showed dramatic increases in healthcare spending over the years. American healthcare system is the most expensive one in the world; in 2004 America spent about 16% of nation’s Gross Domestic Product on healthcare services, which is approximately $1.9 trillion (Economist, 2006). Furthermore, annual spending continues to grow 10 to 15 percent every year (Davis et al., 2003), which is faster than the national inflation growth rate. However, healthcare spending in the United States requires abrupt analysis and new policy solutions; or else it would become an uncontrollable fund-consuming machine.

American economists are now trying to understand the nature of the growing healthcare costs, and to analyze its impact on the overall nation’s economy. Health and Human Services Department identified the major trends that lead to the rapid growth of healthcare spending. These include (but are not limited to) “changes in healthcare utilization, population demographics, price inflation, and advances in medical technology” (HHS, 2005). Healthcare expenditures are rising, but the increase in healthcare spending directly influences economy of the United States and its economic development. However ,it is a well-known fact that healthcare expenditures on employees is the employers’ burning issue for these healthcare costs are much higher than labor, litigation, or even energy. While healthcare prices increase, employers, those who carry a significant portion of the burden, attempt to pass healthcare spending to their employees. For example specific insurance companies will allow consumer to pay more because consumer has not lost weight. While a result, employees are less attracted to join such companies, which in turn results in decreased productivity. The result of this chain is obvious: a slowdown of overall nation’s economic growth.

Healthcare spending growth rate trends show astounding estimates. Since 1960, spending has risen from $27 billion ($143 per capita; 5.1% pf GDP) to amazing $1,678.9 billion ($5,670 per capita; 15.3% of GDP; 2003 data) (HHS, 2005).During research expected that by 2013, healthcare spending will be as high as 18.4% of the GDP. The spending growth for these two trends is much higher than the overall healthcare cost growth, which, in fact, increases faster than such important economic indicators as GDP growth, inflation growth, and population growth rates. It is important to note that the gradual move from hospital to ambulatory setting has resulted in much higher spending on outpatient hospital services and prescription drugs.
Although there is a belief that great proportion of healthcare funding comes from out-of-pocket money, in reality private insurance is the major source. Generally, private and public sectors almost split the overall funding evenly, public sector accounting for 55% and public – for 45% respectively (HHC, 2005). The table below illustrates the sources of funding in 2003: Private Insurance 600 36%, Other private ~83 5%, Medicaid & SCHP 267 16% ,Public Medicare 283 17% and the list goes on. Such a dramatic increase in out-of-pocket spending is caused by the increase of spending on prescription drugs, better utilization, increases in price, new medicines, and most importantly the fact that almost 150% of consumers of prescription drugs – the seniors – pay out-of-pocket nowadays.
Spending is continues to rise private and public to the overall spending.
It is important to note that the proportion of public spending has increased as compared to year 1990 when it was 40% of total healthcare expenditures.
As we can see, current situation in the healthcare system of the United States is far from perfect. As Economist journal authors have written in an article about current problems of American healthcare system, “the world's biggest and most expensive health-care system is beginning to fall apart” (Economist, 2006). Accordingly, American healthcare system is the most expensive in the world, and still it continues to grow faster than population, Gross Domestic Product, or inflation. The shock of the growing prices cannot be ignored, since it directly influences the lives of the public and of the employers, and economy at large.

One of the solutions to the problem of rapidly rising costs would be to try to gradually shift from the belief that employers should provide healthcare insurance for employees. I do not mean they have to quit providing insurance, but they have to grant it in such a way that employees use it wisely. Typically, employees can not afford insurance so employers’ spend a great deal of money for not so important matters; However ,one of the techniques effectively utilized by the major retailer is to have literally all consumer perform some physical activity at least once a day. Elder people and those with health problems would be deferred by such requirements and take out the snack machine and replace them with health snack that would cut down the cost as well. Although healthier consumer would naturally spend less money on medical assistance, which would in turn make the life of the consumer easier, and diminish spending on healthcare services.

The country is developing economically, demographically, and culturally, and thus the population, economy, and increase grow. However, the growth rate of healthcare spending is much faster than any other economic display of the country, which draws healthcare system an unpleasant reality for the government, businesses, and economists. The healthcare system of the United States had forgotten its primary function, which consists in not defeat the economic records, but a natural activity. That will help people fight their health problems and saving human lives.
Bibliography
1. Desperate measures. (2006). Economist on-line journal. Retrieved May 24th 2006 from http://www.economist.com/world/displaystory.cfm?story_id=5436968

2. Davis, K. and Cooper, B. (2003). American Health Care: Why So Costly? Testimony for the Senate Appropriations Subcommittee. The Commonwealth Fund. Retrieved May 24th 2006 from http://www.cmwf.org/publications/publications_show.htm?doc_id=221624

3. Effects of Health Care Spending on the U.S. Economy. (2005). Health and Human Services Department. Retrieved May 24th 2006 from http://aspe.hhs.gov/health/costgrowth/

Similar Documents

Premium Essay

Health Care Spending

...Health Care Spending HCS 440 Health Care Spending Health care spending in the United States is a key contributor to the country's economy. The health care industry provides employment as well as providing services that bring healthier lifestyles, better productivity, and a longer life. Health care also brings the development of new drugs and new medical technology that also helps keep the economy employed. However, although the health care and health care spending does tend to help the economy slightly it is beginning to hinder our economy. "In all industrialized countries, with the exception of the United States, health care affordability is ensured through universal insurance based or tax- finances systems" (Squires, 2012, p. 1). Even though the United States spends more in health care than other countries it does not mean the United States has better quality of care than the other countries. Health care spending is depleting this country and the quality of care is not improving. The United States needs to change the way it spends money on health care before it is too late. Current National Health Care Expenditures In 1980 the health care expenditure was at $256 billion, in 2010 the expenditure went up more than 10 times to $2.6 trillion. The spending, however, has slowed in the last few years. The health care expenditure was growing rapidly from the late 1900s to the early 2000s but has slowed slightly. However, it is still expected that the health care...

Words: 1699 - Pages: 7

Premium Essay

Health Care Spending

...Health Care Spending Marsha Whiteside October 1, 2012 HCS/440 Caryn Callahan Health Care spending is on the rise and is going to continue to rise year after year. The United States spends more on health care than any other country and with the loss of many jobs and low income families the spending is going to continue to rise. The United States spends nearly $2 trillion annually and spends two-and-half times more than the Organization for Economic Cooperation and Development (OECD) average (Johnson, 2012). There are many factors that contribute to the health care spending which include: technology, prescription drugs, rise of chronic diseases, and administrative cost. Not all people are in agreement with the health care spending in the United States and feel if there was some changes made, the spending would be lower and the United States could focus on other issues. The level of current nation health care expenditures is on the rise and is causing hardship on families as well as businesses. The United States spent seventeen percent of its gross domestic product (GDP) on health care which is higher than any other nation (Johnson, 2012). Fifty one percent of the health care expenditures in 2010 were made up of hospital care and physician/clinical services. The other forty nine percent includes: home health care, other professional services, nursing home care, Rx drugs, government administration, net cost of health insurance, investment, and other health and......

Words: 1312 - Pages: 6

Premium Essay

Health Care Spending

...for illnesses. Today in society health care organizations are working side by side with third parties, which are insurance companies, to receive payments for treating individuals when he or she become ill or are in need of serious medical attention, such as surgery procedures. Employers offer health benefits to the employees, which he or she can also add family members to his or her insurance policy to be treated and seen for health care services. The price for health care services are rising every year, and it is making it hard for most individuals to afford health care. Low income individuals and illegal immigrants are those who suffer because they cannot afford the high prices of health insurance premiums. These outrageous health care costs definitely occur because of the costly spending health care facilities due to keeping the facility open for business. The health care industry has grown to become a business and use marketing techniques to compete against other health care facilities. To keep clientele, some hospitals do major upgrades to attract and keep new and old patients. Also purchasing state of the art equipment has its advantages. It shows to outside individuals that the quality of care at their facility would be the best because of the use of smart and up to date technology. As a result of malpractice lawsuits, individuals play a role in the cost of health care services today in society. In consequence of these lawsuits, health care providers have to follow a......

Words: 1214 - Pages: 5

Premium Essay

Health Care Spending

...Health Care Spending Sheilah Schmidt HCS/440 July 21, 2014 Marcia Smith Health Care Spending Health care is rising rapidly. Health care spending is a serious and major issue that needs more focus and stability. In 2009, the gross domestic product (GDP) rose to 17.6% and reached $2.5 trillion. The United States spends thousands of dollars per person for health care. People treated and diagnosed for chronic conditions, and obesity rates are still at large. The current health expenditure for the United States is 15.7% in Gross Domestic Product (GDP). Hospital care, physician and clinical services are responsible for half of the national health care spending increase between 2005 and 2009 (Understanding U.S. Health Care Spending, 2011). If nobody takes action, bankruptcy may be present. Further readings will explain the level of current national health care expenditures and whether the spending is too much or not enough. Further readings will also address where the nation should add the cut; how the public’s health care needs are paid for; and the future economic needs of the health care system. Current National Health Care Expenditures In 2012, the United States spent $2.87 trillion on health care (Management, 2013, p. 1). In 2013, the United States spent $2.9 trillion on health care which is a 3.8% increase. According to Emanuel (2013), the United States spent more than the French and German economy. Health care spending is a big issue in the United States than in......

Words: 1582 - Pages: 7

Premium Essay

Health Care Spending

...Health Care Spending By: Davida McKnight HCS/440 Pranab Root February 16, 2015 Health Care Spending In today’s society the purpose of our nation’s health care practices has shifted from supplying and meeting the medical needs of patients to the supply and demand of fee-for-service care. Our growing health care crisis is the results of medical organizations working with third party payers and private insurance sectors focusing more on the assets of funding instead of the quality of care for patients. As a result the rising cost of health care is continuously huge issue affecting our economy making it difficult for many Americans to live comfortably within our economy less known afford insurance services. The quality of care is not a priority of many health care professionals but the necessity of meeting quantity over volume is the mission of many health care groups. Health care organizations has lost their dedication for healing and helping patients to avoiding and profiting patient volumes. The trending rates of inflation, increased health insurance coverage, demographics, provider merging, technology and the lack of health provider-patient care ratios are enormous contributors as well affecting our nation’s health care spending. The National Health Care Expenditure The National Health Expenditure Accounts (NHEA) are the official estimates of total health care spending in the United States. Dating back to 1960, the NHEA measures annual U.S. expenditures for......

Words: 1683 - Pages: 7

Premium Essay

Health Care Spending

...Health Care Reform Part I Health care spending in the United States is among the highest of industrialized nations (Health Policy Education, 2011). Health care reform found its roots in the 1900s when just prior to that physicians were caring for hospitalized patients without charge. Today it is a main political issue tipping the scales toward a presidential election. Team C chose this topic because of the serious nature and as future managers, leaders in health care administration; a greater understanding is required. This team seeks to discuss three major points in regard to health care spending, such as unnecessary spending, options if health care reforms fail, and ongoing coverage for ongoing care as it relates to macroeconomics and also propose three solutions identified within the research, respectively, information technology, influence of pricing and allocation of services, and prevention. Background Health care expenses in the United States were in excess of $2.3 trillion in 2008. Accounting for three times as much spent in 1990 and eight times that spent in 1980. According to Kaiseredu.org (2010),”This equated to $7,681 per resident and accounted for 16.2% of the nation’s Gross Domestic Product (GDP)” (Background). Below is a graph taken from Kaiser.EDU.org, which depicts how dollars were spent in regard to health care 2008. Today health care costs account for 16% of the nation’s GDP. On an individual basis, per capita, the cost is twice that of other......

Words: 2301 - Pages: 10

Premium Essay

Health Care Spending

...Health Care Spending Paper Milagros Garcia HCS440 November 2nd, 2011 Professor Larry Gonzales Health Care Spending Early in history physicians cared for patients and charged them at a reasonable rate for the goods and services provided to him or her for illnesses. Today in society health care organizations are working side-by-side with third parties, which are insurance companies, to receive payments for treating individuals when he or she become ill or are in need of serious medical attention, such as surgery procedures. Employers offer health benefits to the employees, which he or she can also add family members to his or her insurance policy to be treated and seen for health care services. The price for health care services are rising every year, and it is making it hard for most individuals to afford health care. Low-income individuals and illegal immigrants are those who suffer because they cannot afford the high prices of health insurance premiums. These outrageous health care costs definitely occur because of the costly spending health care facilities due to keep the facility open for business. The health care industry has grown to become a business and use marketing techniques to compete against other health care facilities. To keep clientele, some hospitals do major upgrades to attract and keep new and old patients. Also purchasing state of the art equipment has its advantages. It shows to outside individuals that the quality of care at their......

Words: 1284 - Pages: 6

Premium Essay

Health Care Spending

...Health Care Spending Ninnette Paulino HCS/440 Economics: The Financing of Health Care August 25, 2013 Michele Burka America’s national health care spending grew by 3.9% each year from 2009 to 2011, the lowest since the federal government began keeping these records in 1960. That slow growth appears to have continued into 2012, when expenditures totaled an estimated $2.8 trillion. The biggest reason for this slowdown is that people have spent less on health care in weak economic times. As people were losing their jobs they were losing their health coverage and then hold off on seeing a physician. Even workers that are employed with company-sponsored plans they face large-out-of-pocket costs that they’d rather avoid unless it is truly necessary (Luhby, 2013). According to the Kaiser Family and Foundation and Altarum Institute, they predict that this dampened spending pattern is unlikely to last much longer. As the economy picks up, health care spending is expected to increase, rising to an annual growth rate of more than 7% annually by the end of the decade (Luhby, 2013). When President Obama released his fiscal 2014 budget he proposed a chained CPI- to shrink cost-of-living adjustments for retirees. The use of chained CPI in Social Security and elsewhere in the budget would reduce deficits by $230 billion over a decade. It is also includes $392 billion in savings from Medicare and other health programs by raising Medicare premiums for wealthy retirees and......

Words: 1395 - Pages: 6

Premium Essay

Health Care Spending

...Health Care Spending Paper C Murphy HCS 440 December 19, 2011 Health Care Spending Paper Today, health care issues within the United States are still a major concern in regards to where people of our communities do not always agree with what is being done and what is not being done. The three major issues with health care spending is how much is it going to cost and where is the money going to come from? The amount of per-patient costs have doubled more in the United States than other nations around us. The last issue is the amount of Americans that has no health care at all. This paper will discuss the healthcare expenditures that is necessary for our entire population. It is no secret that costs have been on the constant rise for many years. The expenditures in the United States related to health care, passed over $2 trillion in the year 2008. This has many affects not just on families that are trying to make it but also the businesses and the public budgets. Spending on health care costs are rising faster than the current state of the economy as a whole and also faster than the working people's wages. The United States spends about 20% of the GDP ( gross domestic product) on health care alone opposed to other countries that are spending no more than 12%. Within the next decade or so, the Centers for Medicare and Medicaid predict that the health care growth will surpass the GDP. In the United States, we have the most expensive health care system because it is......

Words: 735 - Pages: 3

Premium Essay

Health Care Spending

...Health Care Spending The U.S. devotes considerably more of its economy to health care than other developed countries. Health care spending has been on the rise for the last couple of decades. The current expenditures have risen from 724.0 billion dollars in 1990 to 2,486.3 billion in 2009 (US census, 2011). Today, we are a nation with Health Care Reform signed into law by President Obama on March 23, 2010, also known as the Patient Protection And Affordable Care Act (PPACA). The unfortunate health circumstances for many Americans became more evident as years passed and the health industry only grew. Healthcare services have become a luxury out of reach of many and a financial burden for others. We will further analyze the financial circumstance that has been questioned by many and that at the moment is being revised and hopefully altered for a better outcome. Over the years, there have been many changes ranging from the Health Maintenance Organization (HMO) boom in the 80’s and 90’s to the more current trend of companies moving toward Consumer Driven Health Plans (CDHP). In 2008, health care spending accounted for 16.2% of the nation’s Gross Domestic Product, highest of all industrialized countries (Kaiser Foundation, 2010). The grow rate for health insurance over the past decade has been around 4.4%, which is higher than the growth rate for national income. Not only is healthcare spending too high but more importantly not accessible to the majority of the American......

Words: 494 - Pages: 2

Premium Essay

Health Care Spending

...the exponential growth of health care spending, as a portion of the GDP, will eventually consume much of the government income as well as suck the resources from personal consumption and create more issues to spiral out of control. The writer takes a deeper angle of looking at health care spending as a result of inconsistent production. To better understand the core of the problem, looking deeper at the health services, consumption of goods, and overall usage of resources have to be seen as a basis of GDP. In other words, as a society, everything people use for everyday living must be produced by the people themselves. If society only creates a certain amount of goods and services, but more of these same goods and services are being depleted at a rate higher than production, special attention must be given to this predicament. The author does not describe particular strategies or techniques, but seems to imply areas that require more focus and attention in order to redirect funding through the proper channels. Using the GDP as its guiding force, rather than just overall health care spending, the author uses graphical analysis to show how health care must be solved internally from a production standpoint (input adjustments) rather than just explaining how much is actually demanded by consumers. Personal health consumptions have risen indirectly with that of nondurable and durable goods showing that people are forced to use more their income towards health services. In the......

Words: 1017 - Pages: 5

Premium Essay

Health Care Spending

...Health Care Spending Jackie Shaw HCS 440 December 19th 2011 Health Care Spending The United States spends more on health care than any other country in the world. The current level of national health care expenditures is astounding. “In 2011, the anticipated total of health care government spending in the United States is 1108.2 billion dollars” (Chantrill, n.d.). Over the years the total of health care spending has increasingly amplified; in 1996 $396.78 billion was spent on health care in 2000 $469.80 billion was spent on health care, and in 2009 $989.65 billion was spent on health care (Chantrill, n.d.). Between 1996 and 2009, a period of 13 years, health care spending increased $592.87 billion dollars. In the following I will discuss the level of current national health care expenditures, whether spending is too much or not enough, where the nation should add or cut funds and why, how the public’s health care needs are paid and the future economic needs of the health care system. The level of current national health care expenditures The level of national health care expenditures is considerably high in comparison, to any other country in the world. “Health spending in the United States is much higher than in other countries – at least $2,535 dollars, or 51% higher than Norway, the next largest per capita spender” (Kaiser Family Foundation, 2011, para. 3). In addition in 2009 the United States spent more than 17% of its gross domestic product on healthcare,......

Words: 1554 - Pages: 7

Premium Essay

Health Care Spending

...Health Care Spending HCS440 Economics the Financing of Health Care University of Phoenix Jonathan Kilroy Talesha Magby Healthcare Spending Over the past couple of years health care spending has been going up higher and snuggles to keep health care cost low. Insurance companies have gone up more when medical expenses started arriving. When Obama have insurance call Obama care, this requires that everyone to have insurance either through his or her job, Medicare, or Obama care. With health care insurance most American still does not have insurance; however the government over the next year would require him or her to have insurance or his or her taxes would be taking. This research paper will explain the level expenditures in health care, health care spending add or cut of health care and public need for paid in health care. According to the reading, “rising costs led Medicare and insurance companies to tighten reimbursing practices, Getzen. T. E. & Allen B ((2007)). Insurance is rising because health care is so expensive then over the past couple of years. However, healthcare expenditures continue to develop quickly within the next few years. This mean with the health care rising there......

Words: 1367 - Pages: 6

Premium Essay

Health Care Spending

...Instructor Ethical standards are important with any organization but more so when it deals with financial reporting. In health care today organizations must use ethical and financial practices that are superb to guarantee a successful organization. In today’s health care, finance is very important allowing for a successful organization. In the health care industry like any other business those in the health care industry must adopt a standard for ethical and financial practices to help increase the value of the organization. Having high financial standards and ethical values this helps to improve the consumer confidence of all that utilize the services of that particular organization. When individuals are looking for health care they will not utilize an organization that is known for having a high death rate, but rather one where the death rate is low. The health care industry is one of the toughest industries within the United States. Those who work in the health care industry are responsible for the decisions that pertain to a person’s life and how the money within the organization will be spent. They are also responsible for the cost of medical services utilized within the community. A declining economy has helped to make the health care environment at times difficult and challenging for patients, physicians, policymakers, and society. It is important that health care organizations have a code of ethics to ensure that all departments are doing what is expected of them......

Words: 875 - Pages: 4

Premium Essay

Health Care Spending

...Health Care Spending My position on national health care spending is way too much monies is going out and not enough people supporting the problem. A universal health care plan for every man, woman, and child who resides in the United States is the most economical way to achieve this goal. All working citizens must have monies automatically taken out of their paychecks and if you can afford more than the basic plan, then there will be plans available that you can upgrade to like Aflac. No matter how poor or how rich you are, everyone has the basic plan and everyone contributes to that plan. In this paper we will discuss the current level of national health care expenditures, the level of spending, where the nation should cut, and how the general public’s needs are being paid by, to finally doing some forecasting of future economic needs. At a NCSL Legislative Summit in August, 2013 it was noted that America spends, on average, nearly $9,000 per person on health care each year. The cost to the nation is $2.8 trillion, almost 18 percent of the GDP. The GDP is projected to be at 19.6 percent by 2021 (National Conference of State Legislation, 2013). In the projected years of 2011-2021 Medicare is expected to have a growth of 6.1% per year average over these years, Medicaid growth is expected to be 8.2% per year, private spending average per year 5.3%. By 2021, federal, state, and local government health care spending is projected to be nearly 50 percent of the national health......

Words: 2267 - Pages: 10