- October 11, 2012
- Posted by: essay
- Category: Term paper writing
By few indexes, health care spending keeps on rising at a fast rate and making companies and families reduce spending on operations and household respectively. Researchers agree that the US health care system is full of ineffective operations, disproportionate administrative expenditures, overstated prices, mismanagement, and unsatisfactory care, fraud and waste. These issues considerably increase the price of medical service and insurance for employers and employees and impact the security of families.
Most health care expenses continue to grow, with patients’ cash spending having increased by 40% in the last decade, mostly because of the aging population and chronic illnesses like high blood pressure or diabetes (Reinberg, 2009).
In 2008, health care expenses in the USA made $ 2.4 trillion, which is $ 7900 per capita. General health care spending made 17% of GDP. Spending on health care is 4,3 times the sum appointed on national defense (Reinberg, 2009).
Although almost 46 million Americans are still uninsured, the USA wastes more on health care than any other industrialized countries, which provide health care insurance to all their residents. Health care spending made 10,9% of the GDP in Switzerland, 10,7% in Germany, 9,7% in Canada and 9,5% in France, according to the Organization for Economic Cooperation and Development (Keehan, 2008).
According to a recent research, the USA spends excessively $ 480 billion each year if compared to West European countries having universal health care insurance coverage. The expenses are basically connected with additional administrative charges and little quality of service. The United States of America spends six times more per person on health care system administration than West European countries (Keehan, 2008).
One of the biggest parts of costs is included into the health care insurance system. Premiums for employer-based insurance grew by 5 % in 2008. Companies with less than 24 employees, witnessed a growth of 6,8%. The annual payment expected to be paid to health insurer by an employer for a insurance of a family of four made $ 12,700 on average in 2008. Employees donated almost $ 3,400, which is 12% more than in 2007. The annual payment for family insurance considerably overwhelmed the total earnings for a full-time, minimum-salary employee ($ 10,712) (The Henry J. Kaiser Family Foundation, 2008).
Since 1999, premiums for employment-based health care insurance have grown by 120%, if compared to increasing 44% inflation and increasing salary rise of 29% during the same period. Average out-of-pocket expenses for contributions, co-payments for medicaments, and co-insurance for hospital and doctor visits grew by 115% in the same period. Thus, health care insurance costs are the most rapidly growing expenses for employers. If nothing changes radically, expenses for health insurance will go beyond incomes by the end of the next decade (The Henry J. Kaiser Family Foundation, 2008).
National researches show that the main reason for people not purchasing insurance is its extremely high price. Economists have discovered that increasing health care prices are connected with falls in health coverage. A recent survey by Harvard University showed that the average paid ready medical debt for those who reported of bankruptcy was $ 12,000. The research displayed that 68% of those who bankrupted had health care insurance. Moreover, the survey showed that 50% of all bankruptcy reports were partially the result of medical costs. Every 30 seconds in the United States of America somebody reports of bankruptcy as a result of grave health problems (Reinberg, 2009).
Another aspect is that the slower increase in prescription drug expenses was mainly because of slower increase in price rises, growing usage of generics, and increased patient worries about drug safety. Expenses on prescription drugs rose by 4.9% in 2007, down from 8,6% in 2006, causing more than half of the reduced cost rate. According to the study this was the slowest rate since 1963 (Keehan, 2008).
More than 25% of Americans reported that household difficulties were caused by medical debt, including incapability to pay rent or finance payments and bad credit ratings development. About 1,5 million families lose their homes annually due to unreasonable medical expenses. A research of Iowa citizens showed that in order to deal with growing health insurance expenditures, 86% reduced the amount of money they could save, and 44% reduced expenses on food and heating (The Henry J. Kaiser Family Foundation, 2008).
Average annual cash paid costs rose from $ 427 in 1996 to $ 741 in 2005. Withdrawing elderly couples will require saving $ 250,000 in order to cover most essential medical services. Many researchers consider that this amount is conventional and that $300,000 might be a more realistic figure. Public health care expenses overtook private expenses, including rises in Medicaid costs. Other health care expenses ”“ comprising hospitals, private health coverage, nursing homes, physicians’ charges ”“ continue to grow.
Apart from that, according to the report prepared by the economists Â of the Center for Medicare and Medicaid Services (which is one of basic subdivisions of the Department of Health and Human Services), charges on prescribed medications grew by 3,5% in 2008 up to 235,4 billion dollars, comparing to 4,9% in a previous year (Keehan, 2008).
The authors of report mark that, foremost, the economic recession caused the observed decline, as the amount of medical prescription decreases and the patients are also more inclined to pass from original preparations to generic medications. Nevertheless, it is also reported, that expenditures on prescribed preparations can increase twice up to $453,7 billion by 2018, partly due to the approval of new proprietary medicines (Keehan, 2008).
The financial position of Medicaid and Medicare ”“ is a reminder that we ought to intensify our current attempts to reform the providing of health care in our country to achieve the aim of high-quality, available health care services for all Americans.
Politicians and government officials agree that health care expenses should be regulated. But they dispute over the best means to deal with rapidly growing health costs and health insurance fees. Price regulations and strict funds on health care expenses can be implemented.
Others consider free market competition to be the best solution of the problem. Public health supporters think that if all Americans accept healthy lifestyles, health care spending would reduce as people would need less medical care.
Taking the time and trying to avert illnesses such as diabetes and hypertonic will save Americans’ money and raise their standard of life. We should concentrate attention on forming a way for FDA support of generic biologics which presents considerable savings and on replacing legal and regulatory barriers that delay the implementation of generics.
There seems to be no conformity on a single resolution to health care high cost level. Many methods might be used to regulate prices. The only thing we know is if the increase in health care costs and health insurance charges stays at the same rates, the inaction costs will strongly impact employer’s profits and consumer’s wallets.
The US health care expenses are expected to grow at similar rates for the next 10 years reaching $ 4,3 trillion in 2017, or 20% of GDP. The charges of the American health care system planned for 2009 will grow only by 5,5% up to 2,5 trillion dollars, which is the lowest increase since 1997 (Reinberg, 2009).
According to prognoses, in the nearest decade the spending on health care will annually increase by 6,7%; while the general annual economic growth will make 4,9%. The increase of charges will be partly caused by high prices on medical preparations and by the general senescence of the population. The latter factor, in its turn, will result in the increase of needs in medications for treatment of chronic diseases, such as hypertension and diabetes. Spending on prescribed medications for this period will double up to 515 billion dollars, comparing to 231,3 billion dollars in 2007 (Keehan, 2008).
The leading American experts on issues of health protection promise President Barack Obama to reduce expenses by 2 trillion dollars in the nearest ten years (i.e. by 1.5% annually in 2009-2019). The officials declare that the realization of such initiatives will allow to save 2500 dollars annually in each American family, consisting of four persons, starting from 2013. Reforms of the US health care system, directed on making medical services more accessible for all categories of citizens, are one of the priority tasks of the new administration (Reinberg, 2009).