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Impact of Cost of Health Care on the US Economy - Assignment Example

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The author examines the impacts of cost and the rate of growth in health care spending, in the United States, which have increased significantly. The increase has been to extents of outpacing the growth rate in population, inflation, and gross domestic product. …
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Impact of Cost of Health Care on the US Economy
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Download file to see previous pages A look into the year 2005, expenditure on health care was about $2 trillion or $6,697 per capita, which correspond to 16% of the GDP. The continued rise in health spending over the last four decades is going to go higher, and the expenditure will reach $4trillion, which is 20% of the GDP, by the year 2015. For many years, the continued increase in health care expenditure has been the center of heated debate in the US for many years. Research work and anecdotal reports influence further concerns. This points out that the rise in health care expenditure is likely to harm the US economy. Expenditures on health care have the potential to affect an economy in a number of diverse and complex ways. In addition, the emerging effects may vary across all sectors of an economy as well as across population groups. One notable impact of increased expenditure on health care is the decline in general economic growth. However, the same effect has the potential to boost economic growth in some sectors of an economy. Therefore, gaining an understanding of how increased expenditure on health care affects the economy requires evaluation through various dimensions (Eaton et al, 2002). The state, Federal, and the local governments have the duty to collect taxes from households and business premises. The tax collections help to finance public health insurance programs as well as providing direct health care to households. On the other hand, businesses are responsible for providing employment to households and health insurance to their employees. Therefore, the households emerge as the final consumers of the health care and at the same time bear some costs on health care (Eaton et al, 2002). It is worth noting that the impacts of health care on a single sector are likely to affect results from other sectors. An example is a situation where the government reduces its expenditure on health care by reducing the eligibility for public health insurance. This action by the government leads to an increase in un-insurance rates among households.  ...Download file to see next pages Read More
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