Health Care Spending in America Essay

1421 Words6 Pages
Health Care Spending

One of the issues that is widely discussed and debated concerning the United States economy is the healthcare system. Unlike in the majority of developed and developing countries, the healthcare system in the United States is not public, meaning that the state does not provide free or cheap healthcare services. This paper addresses many of the factors contributing to the rising cost of healthcare. In Canada or Great Britain, the government funds healthcare providers through taxes, and such a system is called social. The United States, on the other hand, being a profoundly capitalistic country, opted for another route and passed the burden of healthcare spending on private consumers as well as other
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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. 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). Recent research estimated that by 2013, healthcare spending will be as high as 18.4% of the Growth Domestic Product. 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. 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. A dramatic increase in out-of-pocket spending is caused by the increase of spending on prescription
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