Health Care Spending
Health Care Spending
“Historically, U.S. health care spending has grown at rates exceeding the economy’s growth rate, often by at least 2 percentage points per year” (Holahan & McMorrow, 2012, 393). Recently, it seems that the rate of health care spending has slowed down a little, though no reasons can be pinpointed as to why this is. There are many factors that affect the growth of health care spending, and plenty of solutions have been proposed to help improve this issue. Factors such as advancements in medical technology and an increase in the price of prescription drugs cause health care costs to rise year after year. Solutions have been presented and implemented, like Medicare and Medicaid and managed care plans, however, even these components have added to the health care spending issue. With all the discussion and debate, one thing can be agreed upon, something needs to be done.
In recent years both public and private payers have experienced an inclement rise health care spending that has exceeded income growth. This growth started right after the end of World War II and has continue to increase every ten years, health care spending has exceeded the gross domestic products (GDP) which had a projection of 26% by 2035 taken for health care spending, prior the health care reform was passed. This number is only going to continue increasing, which bring in the importance of control the spending since the nation’s long-term fiscal balance will be determined by the future rate growth in health care cost. According to Chernew (2010) the primary determinant of spending growth is the development and diffusion of new medical technology. However this does not imply the establishment of new technology rather focuses on how to use it with technologies and systems already in use, in other words make it compatible to work together. The diversity of technologies contributing to spending growth generates a diversity of pathways by which...
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