HCS 440 – Economics: The Financing of Health Care
University of Phoenix Online
Instructor: Geoffrey J. Suszkowski, Ph.D., LFHIMSS
October 25, 2010
The subject of healthcare in the United States can be a contentious one, and it is also an area where peoples' perceptions don't always align with the facts given by policymakers. What makes healthcare spending so scandalous is the amount of money the United States pours into healthcare each year. Over $8,000 per-patient per-year costs, amount that has more than double any of the other nation. Yet 15 to 25% of the American population has no healthcare coverage due to a lack of any form of universal health care. Despite all this money spent, efficiency in the United States system is well below that of its peers. The position of this paper is in support for healthcare expenditures in that it is necessary for the American population.
Current level of national healthcare expenditures Healthcare expenditures have risen rapidly in the last decade, imposing increasing stress on families, businesses, and public budgets. Health spending is rising faster than the economy as a whole and faster than workers' earnings. The United States spends 19% it’s of gross domestic product (GDP) on health care, compared with 10 to 12% in most major industrialized nations. The Centers for Medicare and Medicaid Services (CMS) projects that growth in healthcare spending will continue to outpace GDP over the next 10 years (Davis, Schoen, & Guterman, 2007).
Spending: Too much or not enough? The United States has by far the most expensive health care system in the world, based on health expenditures per capita (per person), and on total expenditures as a percentage of gross domestic product (GDP). As shown in Table 1, the United States has spent $8034 per capita on healthcare thus far in 2010. The United States health spending as a