In the United States, the ability to live and maintain a healthy lifestyle comes at asignificant cost. In order to understand the extreme expense of health care, a deep andthorough analysis of the health care system is necessary. When probing into the U.S.health care system, there are two distinct elements that are in need of discussion. First arethe financial outlays related to health care. This would include health care in terms of gross domestic product (GDP), in comparison to other countries, and in terms of various private and public programs available. Second is the outcome of these financial outlaysmeasured in terms of quality. Quality can be measured by evaluating the extent to whichhealth care is made available and affordable to constituents of the U.S. Ultimately, theconclusion can be made that health care in the U.S. is not perfect and there are severalways in which to reform it.Americans spend more money on health care than they do on food.

Healthspending in the United States accounts for approximately 16 percent of GDP.

In dollar terms this is more than $2 trillion or $7,000 per capita.

This number has catapulted sincethe early 1960s, when health spending was a mere 5.2 percent of GDP.

The two largestgovernment health care programs, Medicare and Medicaid, account for $401.3 billion and$310.6 billion, respectively.

Medicare provides health care for the elderly, and Medicaid provides health care for the poor. The other largest chunk of health care spending is done by businesses, which accounts for $496.8 billion spent in 2006.

The other share of the $2trillion is purchased by single-payers. This provides a comprehensive macro perspective

Krugman, Paul, and Robin Wells. 2006."The health care crisis and what to do about it," New York Review of Books, 53 (March 23).

Pear, Robert. 2008."Health spending exceeded record $2 trillion in 2006,"New York Times (Jan 8).

Ibid.

Ibid 1.

Ibid 2.

Ibid.

of domestic health care expenditures; however, it does not provide adequate scope of theexorbitant amount of spending compared to countries around the world.According to the

McKinsey Global Institute

, “the United States spends some $477 billion – $1,645 per capita – more on health care than their peers.”

The comparison wasmade to 13 OECD countries, which are considered comparable to the U.S. One couldargue that the United States may have a higher prevalence of disease necessitatingincreased health spending, but the same study dispelled that notion indicating that thereason the U.S. spends more is attributable to controllable factors.

The

McKinsey Global Institute

pinpoints several specific inputs of the health care system that are well abovecomparable country’s spending averages.“The cost of drugs to the system contributes to higher spending by an estimated$66 billion […] $57 billion is incurred by outpatients and $9 billion is consumed inhospitals and outpatient procedure centers.”

What is especially surprising about thisstatistic is that U.S. patients consume approximately 20 percent less prescription drugscompared to other nations. This suggests that the price of prescription drugs in the U.S. issignificantly higher, apparently 50 to 70 percent higher, than in peer countries.

The large price inflation may be the result of America’s propensity as an early adopter of pharmaceutical products, which are patent-protected and are sold at far higher prices.“Physicians total compensation attributes an additional spending […] of $58 billion, of which $50 billion arises from their remuneration from salaries, professionalfees, or a combination of these […]”

U.S. physicians are compensated as much as

Agrisano, Carlos, et al. 2007. Accounting for the Cost of Health Care in the United States. San Francisco:McKinsey Global Institute. (Synthesis

)

Ibid.

double, in some cases, compared to physicians in OECD countries. Reasons for excessivecompensation are rooted in the unique U.S. structure of remuneration.

Physicians willoften follow a fee-for-service format which encourages seeing more patients. The

McKinsey Global Institute

followed up on this contention and found that U.S. physicianssee 1.6 times more patients than do physicians in other countries.

The necessity of allthese check-ups is immediately put into question based on the similar health conditions of individuals in OECD countries. With such high costs of health care, one would expect thequality to be equally as high.A reasonable gauge of quality for a health care system could be based on theavailability of care in the system. The U.S. has significant issues with availability.According to the

Kaiser Commission on Medicaid and the Uninsured

, 45 millionAmericans under age 65 lacked health insurance coverage in 2004.

This accounts for 18 percent of the non-elderly population. Of those who do receive health care, 61 percentreceive it from employer-sponsorships, 16 percent from Medicaid/Other public programs,and 5 percent from private non group coverage.

There are several factors intrinsic toeach of the insuring methods that impede insuring the uninsured.For instance, employer-sponsored health insurance is voluntary with asignificantly larger percentage of the uninsured represented by employees of small- tomedium-sized companies. Employer-sponsored group plans cost approximately $4,000 per year for individuals and $11,000 for a family of four in 2005.

Due to these highcosts, some small- to medium-sized companies may be unable to provide this benefit to

Ibid.

Kaiser Commission on Medicaid and the Uninsured. 2006."The uninsured: A primer." Washington, DC: Kaiser Family Foundation.