Health Care Spending Paper


The United States of America is a country that has experienced tremendous achievements in the establishment of a model health care system. The current system is indeed functional within constraints of the impending economic dilemma experienced by many world economies. Despite these problems the giant economy’s analysts strive to establish spending rates, which are manageable in the current situation. This is amid growing population concerns that could significantly impact spending variables (Shi and Singh, 2009). In as much as there are measures established towards streamlining the national expenditure budget on health care there is need to establish better systems aimed at promoting sustainable economic achievements.

Current Level of National Healthcare Expenditures

The current national healthcare expenditure levels simulate a drift towards the emancipation of critical health care systems. The mode of service provision in the United States of America is mainly run though the already established public and private health care entities. However, majority of health care entities are privately owned and this has a particular effect on the manner in which the system fundamentally operates (Shi and Singh, 2009). The support of health care programs is mainly through Medicare, Medicaid, Veterans Health Administration, Children’s Health Insurance Program, and private insurance companies, which provide major support for the critical health care system. The current expenditure of the United State’s health care stands at a big figure of 16.3% of the country’s Gross Domestic Product (Herman and Alison, 2009). This figure is unfortunately ranked among the highest going by the current world rates.

This trend may progressively rise as population variable increase against a backdrop of fluctuating market value of the United States Dollar. The Actuary office found in Medicare and Medicaid project that the spending level is bound to increase to about 20% in by the year 2019 (Herman and Alison, 2009). A breakdown of this figure indicates that physician services account for over 20%, pharmaceuticals account for 10%, hospital care accounts for 32% of the total expenditure (Herman and Alison, 2009). The spending levels have been increasing gradually as the years keep on progressing. In the year 2009 for instance, the spending level was established to be $2.51 trillion dollars, which translates to $8,047 per person and 17.33% of the Gross Domestic Product going by the current estimates of the total US human population (Herman and Alison, 2009).

Is Spending Too Much or Not?

These spending levels are relatively high going by the current estimates of the world economic and spending trends. These consistently high figures are as a result of the changes going on in the medical field with regard to current legislation provision in health care, technology change and increased need of medical personnel in the newly established centers. Economic experts postulate that the spending trends exhibited in health care are fundamentally high to the level that other economy sectors are feeling the strain (Shi and Singh, 2009). This is because health care is internationally regarded as a basic human right hence changing some of its trends has proven to be an uphill task. These factors were also fundamentally established through a critical review of the impending congress budget recently approved by the high office.

Other variables leading to this kind of an association include an increase of the expenditure levels in health care insurance, drug prescriptions, and technological enhancements (Lemco, 1999). In addition the role played by the factor of income variables is also a major contributor. A recent study conducted on member countries of the Organization for Economic Co-operation and Development (OECD) of which the US is a member shows that it spends relatively high compared to other member states. However, after conducting sufficient statistical analysis it was established that the figure is way below the standard median for OECD after which analysts attributed this fact to high spending patterns on the average US citizen.

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Where we as a nation, should add or where we should cut

There is dire need to carry out a cost benefit analysis on the state of affairs concerning United State’s impending high health care costs. The responsibility of health care is spread across many stakeholders all who aim at guaranteeing accessibility to these basic services. Thorough stakeholder involvement would serve to identify some of gaping holes leading to the daily increasing costs (Shi and Singh, 2009). Stakeholders responsible for paying health care services need to stage focused group discussions in order to identify critical areas of health care that need more attention. This would ultimately involve households, businesses, and Government departments. The Agency for Healthcare Research and Quality launched a Medical Expenditure survey in order to establish areas where citizens tend to spend more, the age groups concerned and the modes of payment. It was established that a good percentage of United States citizens spend significantly on children health care services and among the vulnerable groups include age groups 0 – 18, 45 – 54, 65 – 74, and 85 and over (Shi and Singh, 2008). Among these groups, household contribution came more from the age group 19 – 64 which represents the working adults. 

This signifies that there is need for the Government to establish elaborate insurance plans, which offer relative packages with due consideration of citizen status at relative points as opposed to the utilization of fixed plans. There is also need for a shift in focus towards the expenditure in preventive healthcare, as this would ultimately benefit the population in a great way (Shi and Singh, 2009). This should essentially implemented in a progressive fashion through the sensitization of the population on the need to lead healthier lifestyles in order to cut household health care costs. There is also a need for future national healthcare expenditure plans to include the involvement of projected economic analyses which can be subjected to periodic changes to incorporate the constantly changing variables.

How the health care needs of the general public are paid

Health care needs for the general public are paid for by various organs established through certain institutional frameworks.  Some of the organs responsible for paying healthcare bills include health insurance companies most of which are privately owned. The Employees Benefit Research Institute indicates that health insurance plans purchased through employer enabled plans account for 59.34%; plans purchased through individual arrangement account for over 8.94%; and Government supported plans area accounting for 27.83% (Herman and Alison, 2009). There is a strict allotment criterion, which is based on the provision of eligibility plans for the existing employee database. The  Medicare plan is generally meant for the older resident citizens who are over 65 years of age while Medicaid targets vulnerable populations with specific focus on those who are financial disadvantaged; these account for 3.13% for Medicare and 13% for Medicaid of the total national health insurance expenditures according to current statistics (Herman and Alison, 2009).

There are government plans, which cater for the insured lot of the population who are mostly immigrants and some able persons financially. However, data from the US census bureau of statistics show that this figure, which is about 16.12% of total insured health care cost, goes unaccounted for since these are in the form of uncompensated plans (Lemco, 1999). In a  recent study carried out by economic analysts it was established that high health care costs were partly attributed to the influence from inflated bills as seen in private establishments. These are responsible for the current 15% out of pocket personal initiatives to cover for extra unaccounted for costs, which is a growing among mainstream healthcare practitioners.

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Forecast of Future Economic Needs of the health care system

The trend in the healthcare system postulates an increase in the annual expenditures for both the government and private health providers. For instance, the national healthcare expenditure per capita is bound to rise to a high of 17.3% according to the annual percentage change rates. The nursing home care expenditures are also bound to rise to an projected increase in the number of citizens belonging to the older population. This figure is projected at reach well above $144.1 billion US dollars, which has been occasioned by a slower price growth of health related commodities (Shi and Singh, 2008). This will impact on health provision by Medicare and Medicaid programs since majority of these persons fall under their jurisdiction.

There will also be an increase in expenditure budgets of majority of physician and clinical service providers. These needs are important in enhancing the general health care of the American citizen. They are also in pursuit of the achievement of the Millennium Development Goals which envision the development of health care programs towards sustainability while focusing on future population fundamentals (Shi and Singh, 2008). These needs can be achieved through the development of efficient funding mechanisms, which pursue a bottom up approach as opposed to the current top down approach. This fundamentally reduces the governments burden on its citizens for catering for their healthcare. Another approach that can be used is the pursuit of unilateral health plans, which incorporate citizenship goals and elaborates on the decentralization of insurance health programs.

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