Health Care Spending Paper


Health Care Spending Paper

Health Care Spending Paper


Health care costs for individuals in the United States have increased and will continue to increase. The number of people needing care and insurance is one of the major factors in health care spending. nother factor is the amount needed to be spent on new e!uipment and technolog" which will alwa"s continue to change. The U.S. health care spending accounts for 1#$ of the gross domestic product %&'P() which is the highest compared to other countries. lthough the merican populations have benefited from the investments made in health care) it still puts strains on the s"stems used to finance health care) such as private and public insurance programs. *an" people are still without insurance and those who do have insurance have seen their out+of+poc,et e-penses grow from their deductibles and copa"ments %.aiser /amil" /oundation) n.d.(. Health Expenditures The national health e-penditures currentl" have reached 02.1 trillion. ccording to /orman %2112() 3This translated into 04)12# per person and 1#$ of the &ross 'omestic Product %&'P(5 %para. 6(. 7oth of these records are the highest among the nations. The hospital spending accounts for 61$ of the national health care e-penditure) which continues to grow. 'ue to a 1.2$ *edicare fee schedule update for ph"sicians in 211#) the ph"sician e-penditure is at an generall" low rate at 8.9$. Prescription drug spending has increased to 19$ due to the implementation of *edicare Part '. dministrative cost have also grown over the "ears and is currentl" at 2.2$ in the health care spending e-penditure. The growth of this is due to the amount of *edicare beneficiaries who have enrolled in the *edicare dvantage plans. *edicaid spending has for the first time ever) decreased in the amount spent on health care) partl" due to *edicare Part ' %/orman) 2112(.

Spending too much:

Health Care Spending Paper The level of health care spending is too high and continues to grow. ;t will continue to


grow and e-ceed the overall &'P) which does not leave open opportunities for spending in other areas. Health care spending has not been manageable for some time now) resulting in a higher number of people uninsured and a greater number of consumers and emplo"ers struggling to afford insurance. The increased use of the *edicare dvantage plan has increased the importance of managed care and also puts the remaining fee+for+service s"stem at ris, %/orman) 2112(. Health care in the U.S. is also much higher priced for the services than other countries. ccording to .elle" %2111() the public<s lac, of mar,et power = the abilit" to drive price based on suppl" and demand) as with most other products and service = is the cause of high prices in ph"sician services) hospital services) and prescription drugs %p. 21(. To Add or Cut Spending ccording to .elle" %2119() 3>stimates suggest that as much as 0411 billion a "ear in healthcare costs do not improve health outcomes. The" occur because we pa" more for care rather than better care5 %p. 2(. ?e are often provided with service that do us no good or services that we reall" do not need. Too much is spent on unnecessar" hospitali@ations) unneeded tests) over+ priced drugs) and more e-pensive e!uipment that wor,s just as well as the last and cheaper e!uipment %.elle") 2119) p. 2(. Compared to other countries) the U.S. health care costs are too highA more is spent per capita and the &'P percentage is the highest. Health care costs also can be reduced b" eliminating the amount of medical errors) fraud and abuse) and pa"ments for services with no evidence that the" contribute better health outcomes %.elle") 2119) p. B(. ccording to .elle" %2119() 3The /ederal 7ureau of ;nvestigation %/7;( estimates that fraudulent billings to public and private healthcare programs are 6+11 percent of total health spending) or 048+0281 billion in fiscal "ear 21195 %p. 14(. .elle" %2119() states that a substantial amount of care provided adds no or little value to the diagnosis of a patient<s condition or effective

Health Care Spending Paper treatment of a diagnosed condition %p. 12(. This means that the use of diagnostic test) high+price procedures) and irrelevant use of antibiotics can be decreased. The result of this could save


millions of dollars in health care e-penses for hospitals) patients) and insurance companies. Health care costs also can be cut b" administrative costs. ccording to , %2111() 3 t least 4$ of health care e-penditures are estimated to go toward for the administrative costs of government health care programs and the net cost of private insurance.5 Health Care Finance The public<s health care needs are paid for b" public and private health insurance companies) which in the "ear of 2111 cost about 02.# trillion. This is ten times over the 028# billion spent in health care e-penditures in 1921 %.aiser /amil" /oundation) n.d.(. Health care needs for citi@ens age #8 and older are covered through *edicare with no direct out+of+poc,et e-penses. Cot all drug costs and medical services are covered under *edicareA some re!uire additional coverage from private insurers %Torre") 2111) para. 1(. Private health insurance is available to emplo"ees through their emplo"er. mericans under the age of #8 who cannot afford health insurance have a chance to be covered under state+run programs) such as SCH;P for children. There are millions of people still uninsured and man" who are underinsured %Torre") 2111) para. 2(. ccording to Torre" %2111() 3?ith the passage of the healthcare reform in *arch 2111) the number of uninsured mericans is changing so that b" 211B) 62 million more mericans will have coverage5 %para. #(.

>conomic Health Care Ceeds The future economic health care needs are e-panding health care coverage and addressing the rising costs. The percentage of mericans with health insurance declined in 2119 % merican College of Ph"sicians) 2111(. ccording to the merican College of Ph"sicians %2111() 3The

Health Care Spending Paper number of uninsured persons reached an all+time high) with almost 81 million people having no health insurance coverage and 89 million being without health insurance at least part of the "ear5 %p. 2(. *an" people have also signed up for *edicaid and man" more need to sign up with the time of the 7ab" 7oomers. ;f the health care s"stem does not come up with a solution to the


finances of health care and health insurance it will not be provided. ;f the costs of health insurance are also not ta,en into account) man" will lose their insurance because the" can no longer afford it. ; believe the needs of the health care s"stem will be met through government financing and other programs) which ma" result in higher ta-es. ;n 211B the ffordable Care ct % C ( will become available to nearl" all mericans and will address the challenges of rising costs) inade!uate capacit") and coverage. ccording to the merican College of Ph"sicians %2111() 3 C will address the shortage of primar" care ph"sicians b" reforming pa"ment s"stems and b" the funding of primar" care training programs5 %p. 1(. The health care s"stem needs to reali@e how their mone" is being spent and wasted. The costs of medical supplies and some prescription drugs are outrageous. Starting with little changes) such as the price of aspirin in a hospital can result in lower health care costs. The important need of mericans and providing affordable health insurance is a major issue. This results in the high health e-penditures that are seen toda". mericans should not have to worr" about whether or not the" will be able to afford health care in the ne-t few "ears) let alone have insurance. mericans without insurance will need to have access to some t"pe of care or insurance. Health insurance companies and emplo"ers need to come up with a solution or find wa"s to help out the people of the U.S. ;f health care prices do not decrease soon) the" ma" never decrease.

Health Care Spending Paper


Deferences merican College of Ph"sicians. %2111(. Health Care Coverage) Capacit" and CostE ?hat 'oes the /uture Hold:. Detrieved from httpEFFwww.acponline.orgFadvocac"FeventsFstateGofGhealthcareFsnhcbrief2111.pdf /orman) H.P. %2112(. Cational Health Care >-penditure UpdateE Cew Threat or an

Hpportunit":. Detrieved from httpEFFwww.ajronline.orgFcontentF191F6F884.full , %2111(. US Health Care Costs. Detrieved from ,aiseredu.orgE

Health Care Spending Paper httpEFFwww.,aiseredu.orgF;ssue+*odulesFUS+Health+Care+CostsF7ac,ground+7rief.asp.elle") D. %2119(. ?here Can 0411 7illion in ?aste be Cut nnuall" from the U.S. Healthcare S"stem:. Detrieved from httpEFFwww.factsforhealthcare.comFwhitepaperFHealthcare?aste.pdf Torre") T. %2111(. Healthcare Deform + How Should Healthcare be Paid /or:. Detrieved from httpEFFpatients.about.comFodFhealthcarereformFaFreform+pa"ment.htm