April 18, 2010
Health Care Spending
Health care is a huge added player in the hat rides the Current national expenditure levels in the United States has more than tripled in the past decade, while the amount of Americans that can afford private health insurance has dropped and the number of people relying on Medicaid and Medicare has increased with the aging baby boomer generation. Medicaid and Medicare being two of the governments most used medical insurances, the spending in health care has grown faster than the economy can bear. The Medicare physician reimbursement system provides a kind of “public good” for other insurance programs; that is, it offers a universally understood and practiced standard fee schedule that insurance companies can adopt or easily modify by changing the dollar conversion factor or separating certain categories. Medicaid, BlueCross, and commercial insurance contracts that cover the 87 percent of the population under age 65 often base their payments on a modified form of the Medicare RBRVS or use Medicare payment levels as a benchmark(Getzen & Moore, 2007). Spending for health care uses a greater part of the economies revenue: the national studies that have been done in the past decade depict that many citizens of the United States will have to make increasingly more disconcerting decisions in daily life and ability to obtain and afford adequate health care insurance for themselves and their families. While there may be future opportunities to constrain those increasingly difficult choices there may be ways to decrease those problematic and health related choices.
Health care spending in the United States far exceeds that of other countries. Approximately 14% of gross domestic product, or $1.6 trillion in 2002, is spent on health care services in the United States. Federal, state, and local governments pay for approximately 45 percent of total U.S.
References: Getzen, T.E., & Moore, J. (2007). Health care economics: Principles and tools for the health care industry. Hoboken, NJ: John Wiley & Sons, Inc. Reuters, Thomson (2010). Thomson Reuters Corporation, Q1 2010 Earnings Call, May-04-2010 http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=TRI:US The Long-Term Outlook for Health Care Spending Congressional Budget Office http://www.cbo.gov/ftpdocs/87xx/doc8758/MainText.3.1.shtml Medicare Payment Advisory Committee, Report to Congress: Variation and Innovation in Medicare 108 (2003), available at http://www.medpac.gov/publications/congressional_reports/June03_Entire_Report.pdf.