Health Care Spending in the United States, Essay Example

Health care in America is offered by multiple individual legal units. Counting both private and public expenditures, more is spent on health care on each individual in the United States than in any other country on the planet. Vigorous argument over health care alteration in the United States involves questions of permission to health care, right of entry, justice, effectiveness, price, and quality. There is sound evidence that the United States has higher survival percentage than most other countries for particular states, including some less widespread cancers. At the same time it appears to have the highest infant death rate in comparison to other developed countries. As a percentage of GDP, public health care expenditure in the United States is superior to most large Western states. The possession of the health care organization is primarily in private hands, despite the fact that federal, state, district, and municipal governments also possess specific facilities. There is no universally accepted structure of government-owned medical services that is exposed to the common people. Hospitals offer certain outpatient care in their emergency quarters and specialty private clinics, but are chiefly present for inpatient care. Hospital emergency sectors and urgent care foundations are suppliers of irregular problem-focused care. In this paper, I will evaluate the current national healthcare expenditures and try to forecast the future economic tendencies and needs of the health care system.

The United Stated health care expenditures have been continuously increasing for the last decade, thus exceeding the growth in national income and inflation. “In 2008, health care spending in the United States reached $2.4 trillion, and was projected to reach $3.1 trillion in 2012.”(National Coalition of Health Care, 2009) Moreover, the total amount of national health expenditures was expected to rise by 6.9 percent, thus exceeding the rate of inflation by two times. Regular Americans appear to receive more benefits from the growing health care funding. This fast growth of expenditures put significant drawbacks on the system we currently apply for health care financing, thus coupling with overall current economic slowdown and rise in federal deficit. Moreover, this increase in spending also affects public insurance programs, like Medicaid or Medicare, as well as private employer-sponsored health insurance coverage. “The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $12,700 in 2008.”(National Coalition of Health Care, 2009) Consequently, employers are continuously increasing fees to the employees by setting up higher premiums, co-payments, and deductibles. Thus, the wages of the employees are growing at a relatively slower rate than the expenses for health care and most of them face struggle when coping with this grows by out-of-pocket financing.  Furthermore, the high cost of health care insurance puts certain drawbacks on Americans, for that appears to be the primary reason why people are uninsured. U.S. citizens are experiencing multiple problems as a result of increasing health care costs, like filing for bankruptcy, inability to pay out rent or mortgage, thus developing bad credit ratings. Consequently, people start saving on their basic needs to cope with health care pay outs: “86 percent said they had cut back on how much they could save, and 44 percent said that they have cut back on food and heating expenses.”(An et al. 2008)

According to Keiser Family Foundation research report, hospital care accounts for the largest share of health spending, thus taking about 30 percent of overall financing.(An et al., 2008) Furthermore, physician and clinical services account for 21 percent of health care expenditures. The remaining amount is spent on program administration, drugs prescription, nursing home care, investments, and others. In order to implement extensive control system for health care spending, government must consider the major driving forces of this growth. The intensity of services is believed to be major driving aspect of costs growth, and it is caused by and increasing incidence of chronic illnesses, thus putting huge demand on the health care system. Other aspects that receive extensive funding are drugs and technology. Both of these areas are constantly improving and advancing, and need constant funding, however, the process of technological development appears to be too fast. Health care expenses also rise with age, for when baby boomers will begin qualifying for Medicare in 2011, most of the costs will be shifted to the public sector.(An et al. 2008) Administrative costs overtake 7 percent of health care expenditures, and they can surely be cut.

According to Centers for Medicare and Medicaid Services, increase in health care expenditure in the United States is estimated to be nearly 7 percent in the year of 2007. Approximate yearly increase is predicted to stay close to the same rate throughout the year of 2017. Over the full forecast interval of ten years, approximate health expenditure is expected to expand more swiftly than yearly growth in both the general economy by nearly 5 percent and in inflation by more than 2 percent. “As a percentage of Gross Domestic Product (GDP), health care spending is projected to increase to 16.3 percent in 2007 from 16.0 percent in 2006. By the end of the projection period, health care spending in the United States is expected to reach just over $4.3 trillion and comprise 19.5 percent of GDP” (National Health Expenditure Projections).

As for health expenses through public projects, increase is projected to slow down to almost 7 percent in 2008 following the 8.2 percent increase in 2006 that was mainly impacted by the use of the federal program to financially support the costs of prescription medications for Medicare recipients. Quite the opposite of the predicted increase for private clients, public health expenditure rise is thought to steadily enlarge on the way to the end of the projection stage, as the primary edge of the baby boom age group starts to sign up for Medicare. “Through 2017, growth in health spending is expected to outpace that of GDP by an annual average rate of 1.9 percentage points. This projected differential in growth rates is smaller than the 2.7 percentage-point difference experienced over the past 30 years, but wider than the roughly similar rates of growth for 2004 through 2006” (National Health Expenditure Projections)

Private health expenditure increase, which incorporates the intensification in out-of-pocket imbursements in addition to the expansion of many private health coverage expenses, is expected to reach a peak at almost 7 percent in the year of 2009. Close to the predicted growth model for private health expenses, increase in private health coverage payments per enrollee is estimated to steadily speed up to nearly 7 percent by the year of 2009, and subsequently, gradually drop to approximately 6 percent by the year of 2017.

All in all, the United States health care system appears to be broken in terms of extra spending. Even though the system may be efficient for the public and organizational sector, the continuous growth of expenditures will eventually lead to even worth consequences. The government must consider all the major driving forces of this growth and find the ways to solve them. Government could implement a payment reform, or provide extensive regulation in terms of policies that slow the growth of the investment. However, we have to remember to think about the access to care on the first place, and not just the numbers and statistics.

References

An, J., Saloner, A., & Ranji, U. (2008). “U.S. Health Care Costs.” Kaiser Family Foundation. Retrieved May 19, 2009, from http://www.kaiseredu.org/topics_im.asp?imID=1&parentID=61&id=358/

National Coalition of Health Care. (2009). “Health Insurance Costs.” Retrieved May 19, 2009, from http://www.nchc.org/facts/cost.shtml/

National Health Expenditure Projections. Centers for Medicare and Medicaid Services. Retrieved May 18, 2009, from http://www.cms.hhs.gov/NationalHealthExpendData/Downloads/proj2007.pdf