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/