National Healthcare Spending In the United States
November 24, 2014
U.S’s Healthcare spending has continued to increase over the last one decade with more than $2.5 trillions being spent each year (Young, 2013). On average, the U.S spends twice as more on healthcare per capita and 50% more as a share of GDP. This is the highest costs spent on healthcare among all industrialized nations globally. Despite the huge spending, healthcare analysts argue that the U.S citizens do not experience the benefits of longer life. In addition, U.S still experiences high infant mortality, lack of universal access and does not offer quality care similar to most industrialized nations. In 2013, the U.S spent $ 2.9 trillion on healthcare and the amount is expected to be increased by 3.8% in 2014 (Young, 2013). It is anticipated that, quick economic recovery, aging population and Obama’s health care Act will add more American citizens to the health insurance rolls. This amount will approximately be 18% of U.S’s economy (Young, 2013). This paper seeks to examine U.S’s national healthcare spending. The research will look into a number of factors including the level of current healthcare expenditures to determine whether the spending is enough or not and areas where more budgeting/cut is needed. Furthermore, the paper will look into how the U.S healthcare needs are financed. Lastly, the research will forecast the U.S healthcare system by looking into future economic needs of the system, why they should be addressed and how they should be financed. Current national health care expenditures levels.
With the implementation of Affordable Healthcare Act (Obama Healthcare), U.S budget on healthcare is expected to increase. The government plan to spend approximately $ 3 trillion in healthcare by 2014, an amount that equals almost 18% of U.S’s economy. Given the huge cost of healthcare in U.S, it will be important to examine the current level of expenditures. This can be achieved by analyzing the pattern of the U.S healthcare distribution in order to know who gets what percentage and how much out of the total allocated nation healthcare budget. One decade ago (2004), U.S spent $ 1.9 trillion (16% GDP) on healthcare. This translated to per capita healthcare of about $ 6,260. One decade later (2014), these figures have increased. Current levels of U.S spending on healthcare are relatively distributed unevenly across individuals, population segments, sectors/payers and specific diseases. For instance, only 5% of the U.S total population accounts for 49% of total healthcare spending. In fact, 44% of U.S healthcare budgets is spent on 15 most serious/expensive conditions while multiple chronic illnesses cost seven times more than patient with one chronic condition. These patterns of spending changes over time and they affect the different payers including private insurers, employers, Medicaid and Medicare (Stanton, 2006). Half of the American citizens spend nothing or little on healthcare but 5% of the population spends half of the total healthcare budget allocation. Therefore, the amount to be spent by 5% of the population aloneis approximated to be $1.4 trillion. In addition, sizeable levels of U.S healthcare costs are spent on the elderly (65 years and above). One decade ago (2004), the healthcare expenses spent by the elderly averaged $ 11, 089 per year while it averaged $ 3,352 for the working people (ages 19-64 years). In 2014 (one decade later), the average amount of healthcare expenses spent on the elderly have increased in U.S due to increased aging population and increased chronic illnesses by the elderly. Examples of chronic diseases that contribute to higher healthcare costs in U.S include diabetes, asthma, hypertension, heart diseases and mood disorders. Spending to cure these diseases has surged from $ 62.3 billion in 1996 to $1.5 trillion in 2012 (Stanton, 2006)....
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