Health Care Spending


Health Care Spending

            As the cost of healthcare continues to increase the number of uninsured Americans that are delaying or avoiding medical care has become a major economic concern. Efforts to improve the current healthcare spending issues must take place before the demand of baby boomers needing healthcare increases at a rate that government programs cannot maintain. This country must mandate a spending plan that is equivalent to the healthcare expenditures in other countries. A reformed system must provide the same level of care to everyone in society regardless of status and must offset the costs that many adults have gone into debt paying for. The level of current expenditures and the nation’s healthcare spending will be outlined followed by a discussion of society’s healthcare and economic needs. Although this is a complicated and controversial issue in healthcare today an envision of how the economic needs will be financed will conclude the discussion.

Level of Current Expenditures

The healthcare in the U.S. has become a matter of national concern over the recent past due to its spiraling cost while standards remain the same if not worse. The figures speak for themselves. In 2007, total national expenditure was a whopping $ 2.3 Trillion or an equivalent of $7,600 per person representing a 6.9% increment over the preceding year (Wood, 2008). This expenditure is equivalent to 15% of the Gross Domestic Production and is four times the annual defense budget. The U.S. healthcare expenditure per capita is the highest among all the developed nations and is expected to rise to 4.2 million or 20% of the GDP by the year 2016 (NCHC, 2008).



Nation Healthcare Spending

The U.S. spends at least five percent more on healthcare as compared to other developed nations. Switzerland’s healthcare costs represent the closest to the U.S. spending with 10.9% of its GDP going to healthcare. Other countries worth mentioning include Germany with 10.75%, Canada with 9.7% and France with 9.5% (NCHC, 2008). In spite of the U.S. national health expenditure being the highest among the developed nations there is a significant difference in terms of quality of healthcare when compared with the other developed nations is not present. The rising healthcare cost in the U.S. is blamed on inflated prices, poor management, excessive administrative costs and poor utilization of resources.

General Public Healthcare Needs

The current level of healthcare expenditure is exorbitant and only adds more problems to the ailing U.S. economy. The health insurance premiums are also on the rise having risen by an average of 6.1% in the year 2007 (NCHC,2008). The average health insurance premium for a family of four now stands at $12,000 per year. Nevertheless, this cover at times does not meet all their healthcare expenditures and they have to pay for medical bills from their own pockets. With the economy almost nearing recession many people are filing for bankruptcy. More Americans are finding it hard to pay their mortgages, college loans and their credit card bills. In view of the prevailing circumstances, the government has an obligation to the people of America of reducing their burden on healthcare expenditure. Currently, the U.S. is the only developed country that does not provide universal healthcare cover to its citizens (Feldstein, 2006). If measures are not taken to reduce the cost of healthcare immediately, the number of Americans who do not have healthcare insurance is going to escalate leading to a crisis as quality healthcare will be out of their reach. About 47 million people or 15% of the population currently do not have healthcare insurance (NCHC, 2008). Already the number of people seeking alternative medical care is on the rise.

In order to address the issue of rising healthcare costs there is importance of looking keenly at the factors accelerating this rapid increase. To begin with, technology is now being incorporated by healthcare providers in treatment. Diagnostic tests and treatments now heavily rely on technology. In addition, ambulatory surgery and diagnostic centers with radiology, laboratory and imaging services have been established by medical groups. The cost of such healthcare comes at a premium as it requires a lot of capital to establish such a practice. The health insurers therefore charge a higher premium for a cover that incorporates such services. The American public has also opted for such premium covers as they believe it gives the best value for their money. This has resulted in competition among providers as they try to outdo each other in terms of technology. In addition, private healthcare plans tend to emphasize on such insurance policies. To remedy this, providers need to balance their portfolio of their medical services. It beats logic to divert all the attention to this premium services whereas the traditional practices which are far much less cheaper have not been declared obsolete. Access to affordable healthcare in the modern day is a basic need. Such insurance policies are discriminatory and do not serve the common good of the people and should be amended to stem any further rise in healthcare costs in the U.S.

Future Economic Needs

As the demand for healthcare continues to increase across the nation the future economic needs of the healthcare system must be addressed. The baby boomer generation will began reaching the age where their health is a major concern. “The impact of the boomer generation’s aging on the health care system has been referred to as an age quake because medically, it is the equivalent of a massive earthquake. The demands on the system are enormous and growing,” says University of Michigan Health System family physician Lee Green, M.D., M.P.H. (Senior Journal, 2005, ¶ 2). The current generation sets high expectations on the healthcare they are provided and the healthcare system must be able to deliver. The economic need for healthcare will not go away with age which is why government must address the delivery of healthcare. Many Americans must choose groceries over a doctor’s visit or paying the power bill over buying their required prescriptions. How does the government address this economic need do not even have enough people or resources to provide care? This is a dilemma and ignoring the economic concerns of society will only continue to decrease the availability of healthcare services and the need for preventive medicine in low income families. The government and communities must come together as one to determine a solution to improving the economic concerns of the current and future healthcare system.

Financing Healthcare Needs

Who should pay for basic healthcare? Are there enough government programs available to support the developing healthcare needs of society? People must learn to take personal responsibility for their healthcare and address major health concerns before the problem occurs. Enforcing a better healthcare system will be a sound opportunity for the government to assist and increase the need for people to care for their personal health. Currently in the U.S. 79 million adults have medical bill problems or are paying off medical debt (ScienceDaily, 2008). Very few families have adequate insurance and must pay for out of pocket expenses that insurance companies no longer cover. According to the ScienceDaily (2008), “The report finds that more than half of working-age adults earning less than $40,000 a year reported problems paying medical bills or being in debt due to medical expenses” (¶ 5). This proves that society alone cannot afford to pay for their family’s healthcare which means assistance must be provided in some way. Employers and the government must not only provide better health insurance programs but must also provide health and wellness programs to increase the overall awareness of preventive medicine. In reality a happy U.S. healthcare system would be similar to European and Canadian healthcare. Everyone deserves proper healthcare regardless of their status and now that our country knows that people cannot afford healthcare on his or her own which is why a universal healthcare system should soon be considered.

A healthcare system that keeps people healthy and offsets any unnecessary costs to adults is a possible solution to the healthcare spending issues. Economically the current healthcare system does not support the financial needs of today’s Americans. The nation as a whole is struggling to make ends meet because the government cannot provide basic healthcare to hardworking families that deserve to be provided proper care. One day, and hopefully soon, healthcare spending will not affect the level of care provided to Americans.












Feldstein, S. (2005). Health care economics. (6th ed). Thomson.

National Coalition on Health Care (NCHC). (2008). Facts on the Cost of Health Insurance and Health Care. Retrieved November 23, 2008, from

Senior Journal. (2005). Baby boomers put the hurt on the Healthcare System. Retrieved November 23, 2008, from

Wood, E. (2008). Reducing Hospitals Costs through Efficiency. Retrieved November 23, 2008, from



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