Health Care Effects On The Economy

Rising health care costs became an issue after the Medicare and Medicaid programs were formed in 1965 and have continued to be a factor in the United States economy since then. “By1970, U.S. government expenditures for health care services and supplies had grown by 140%, from $7.9 billion to $18.9 billion.”() By the 1990s the annual increase in the government health care expenditures was finally brought under control and has fluctuated between a 5% and 8% increase each year since then. This essay will discuss the different factors contributing to the rising costs of health care in the United States, as well as how the cost of health care affects the accessibility and quality of medical care throughout American history.

United States is the largest and most diverse society on the globe. It spends almost 2 trillion dollars every year on health care, which is one in every seven dollars in the economy. U.S is one of the very few nations where all its citizens do not have medical coverage. Although it spends heavily on per capita on health care, and it has the most advanced medical technology system in the world, still it is not the healthiest nation on earth. The system performs so poorly that it leaves 50 million without health coverage and millions more inadequately covered (Garson, 2010).

Health care spending in the United States of America as a percentage of the economy has reached astonishing heights, equating to 17.7 percent. This number is shocking when compared to other counties; in Australia health care is 8.9 percent, in United Kingdom 9.4 percent, in Canada 11.2 percent. If the American health care system were to hypothetically become its own economy, it would be the fifth-largest in the world. While these statistics sound troubling, they lead us to look for answers about the problems surrounding our system. The first health insurance company was created in the 1930s to give all American families an equal opportunity for hospital care and eventually led to a nationwide economic and social controversy that erupted in the 1990s and continued to be shaped by the government, insurance companies, doctors, and American citizens. In this paper, I will go in to detail about the various opinions regarding the controversy, the history behind health insurance companies, and the main dilemmas brought out by the health care crisis. Greedy insurance companies combined with high costs of doctor visits and pharmaceutical drugs or the inefficient hospitals all over America can only describe the beginning to this in depth crisis. Recently, the United States health care industry has become know for the outrageous costs of insurance models, developments of various social and health services programs, and the frequent changes in medicinal technology.

The health care system has had a negative impact on both insured families and uninsured families. Many believe that health care reforms are unnecessary and hence should not be applied. Reducing health care costs will not necessarily benefit the economy. After spending decades trying to reduce health care costs, some commentators and policymakers now argue that health care costs should be increased to stimulate the economy. At the crux of the argument are the notions that increasing spending on health care will create jobs that can be filled by those losing jobs in other areas of the economy and that implementing long-proposed reforms will reduce health care costs. Nay-Sayers argue that health care reforms will only prevent economic growth, and that increasing health care costs in order to reduce them is an inconsistent belief. These two arguments are fundamentally at odds with each other. Advocates claim simultaneously that it would stimulate economic growth to spend more money on these reforms, and that the reforms would reduce total health care costs.

One of the issues is the increasing cost of healthcare which is dominating the health policy in U.S. this is accompanied by an increase in spending on healthcare. According to projections by the government, the spending on medical care will continue to rise. U.S spends more money on health care than any other nation globally (Holtz, 2013). The increase in the spending is as a result of improved tools for disease diagnosis, better surgical interventions among others. This raises an issue for the policy makers on the maximum GDP percentage that a country has to spend on healthcare, and whether the nation will afford the cost that is continually growing. In contemplating any change in the health policy, policy makers should consider the cost of the healthcare and the ability of the nation to support that high cost.

This paper will include: the current health care expenditures whether spending is too much or not enough, where the nation should add or cut, how the public’s health care needs are paid and provide a forecast for: the future economic needs, why these needs must be addressed, how I envision these needs will be financed and conclusion.

25% or more of one’s income going toward health care is too much for today’s economy this

“The amount people pay for health insurance increased 30 percent from 2001 to 2005, while income for the same period of time only increased 3 percent.” (Source: Robert Wood Johnson Foundation). The rising cost of healthcare is a huge problem in America today. In this paper I will analyze the different issues and causes for the increase in cost.

Continued increases in healthcare spending can negatively impact all sectors of the economy (Sood, Ghosh, and Escarse 2007). Budgets are currently limited, so an increase in healthcare funding could mean a reduction in funding to other areas such as education, and businesses, or may cause the government to increase restrictions or raise taxes (Sood, Ghosh,

In recent years, health care has been a huge topic in public debates, legislations, and even in deciding who will become the next president. There have been many acts, legislations, and debates on what the country has to do in regards to health care. According to University of Phoenix Read Me First HCS/235 (n.d.), “How health care is financed influences access to health care, how health care is delivered, the quality of health care provided, and its cost”.

The rise of the cost of healthcare has been a hotbutton political issue in the United States in recent years, especially with the passage of the Patient Protection and Affordable Care Act, commonly known as Obamacare. In 1995, the United States spent a little over 13 percent of its GDP on healthcare. By 2013, spending on healthcare had increased to around 17 percent of GDP (World Bank). This trend is projected to continue; healthcare spending will reach some 34 percent of GDP by 2040, with state and federal Medicare and Medicaid spending reaching 15 percent of GDP (Council of Economic Advisors). For comparison, the entire US federal government spent only 20.7 percent of GDP in 2015 (Office of Management and Budget 163) What is driving this

In March of 2010 President Barack Obama reform Health care in America and implement a new law called the Affordable Care Act. “Millions whom previously could not afford to purchase insurance now had care drastically impacting the way health care would be delivered” (Wilson, 2010). “The Us spends 1.5 times more in health care than any other developed country and 2.5 times more than the average. At least $3000 more per person that Switzerland with comparable income yet americans die earlier and live in poorer health. Growth in the US Healthcare is Unstable , health care spending has doubled in the past 30 years rising from 9.2% of GDP min 1980 to 17.9% in 2014. Health insurance premiums have increased 97% the last decade “(Kane, 2012)

Although, it is important to note that the increase in healthcare spending directly influences the economy of the United States and its economic development. As healthcare prices increase, employers, those who carry a significant portion of the burden, attempt to pass healthcare spending to their employees. As 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.

The U.S. Department of Health and Human Services (HHS) stated that "The health of the individual is almost inseparable from the health of the larger community and that the health of every community in every state and territory determines the overall health status of the nation." It has now become clear that our economy in terms of healthcare insurance is not healthy; the healthcare system in the United States spends 1 cent of every healthcare dollar in the prevention of diseases and 99 cents on the cure. Our healthcare system is the most expensive and yet arguably among the least cost effective in the developed world. Despite the highest per person health care spending among the Organization for Economic Cooperation

The healthcare system plays a key role in the economic stability of our country, as every year trillions are spent in attempt to combat disease and health issues that plaque humanity. As it makes up a significant amount of the expenditures in the economy, so the costs associated with health care of those in pain from illness and injury, including lost productivity, increased need of assistance in living and also the cost of death in some cases, is important to the economic stability and over all standard of living in our country. The key to economic prosperity is balancing the need for care with the costs of illness to keep as many people healthy and well without breaking the bank of collective society. The costs of healthcare have been increasingly problematic in recent years with so many issues surrounding the current system. With the “total health care spending in the United States expected to reach $4.8 trillion in 2021, up from $2.6 trillion in 2010 and $75 billion in 1970, meaning that health care spending will account for nearly 20 percent of gross domestic product (GDP), or one-fifth of the U.S. economy, by 2021” (Aetna). With this in mind it is apparent that as we look at the trillion-dollar industry of the medical community it seems that it needs to be a major focus of our nation as a whole and with the many issues come many creative solutions. First let us analyze the reasons behind the current cost and the major problems facing this industry and than discus what