Health Care Costs



Health Care Costs

Answer 1

The health care system of the United States contributes almost 18% to the Gross Domestic Product (GDP) which is the highest percentage or contribution in the developed world. It is twice as much as per person as compared to any other developed country. The U.S. has made a lot of progress when it comes to health care systems and procedures. They have come up with systems that save babies who are premature and also increase the life of elders who are really ill and all these procedures of health care are very expensive. The growth rate in the U.S. in health care spending has outpaced the growth rate of all the macro economic factors such as GDP, inflation, employment and population. In 1940 to 1990 the annual growth rate in health spending per capita was from 3.6% to 6.5%.the GDP share for health care was around 2 trillion dollars or $ 6,697 per capita that represents almost 16% of the GDP (Catlin et al., 2007).

The remarkable rise in the health care spending and the GDP share dedicated to health care have raised many concerns because a negative effect of the health care inflation cost is observed on the U.S. economy. Since it is seen that the rapid increase in the health care spending can harm the U.S. economy, economists view the increase in health spending as a neutral or a positive impact on the economy. According to Pauly (2003), increase in the health care spending results in fast growth in the health care and the sectors related to it. It will also increase more employment opportunities and higher incomes for workers in medical and health care sectors. Many of the heath firms are owned by United States. When the total per capita GDP increases, consumer will eventually spend a larger portion of their income on health care and this will help improve the health of the population and efficiency (Pauly, 2003).

Up till now we know that the relation between the increase in health care spending and the economy of U.S. is naturally intricate. More spending on health care can be viewed as both positive and negative as according to many economists mentioned above. It can be a weight on broader economic growth and a driver of prosperity both sectorally and locally. From 1990 spending on health care has increased at a rapid rate as compared to GDP, inflation and population. In 2003, the total health care spending rose to $ 1.7 trillion (Pauly, 2003). The rapid rising spending on health care is considered as lowering the growth in GDP and also employment in the overall economy. This gives a rise in the inflation.

The using made on clinic administrations and solutions pressed on to build the development rate in for the most part medicinal services using as administrations move out of the doctor's facility and into wandering settings. Since 1998, spending on health care services as compared to GDP, inflation and population has increased at a ...