Healthcare Finance
In 2010, the United States health care spending grew 3.9 percent. The total health care expenditures reached $2.6 trillion, which translates to $8,402 per person or 17.9 percent of the nation’s Gross Domestic Product (GDP). Health care spending plays a major role in shaping our country's health care system. Financing health care influences how people access health care, the types of health care provided, and how the cost of health care is distributed among members of society by income and by health status. The United States has been in a recession for much of the past decade, resulting in higher unemployment and lower incomes for many Americans. (Wikipedia) There are three main reasons why spending in the United States has significantly increased. Throughout the years, spending on prescription drugs and new medical technologies has been cited as a primary cause of the increase in overall health spending. The availability of expensive, state-of-the-art medical technologies and drugs fuels health care spending for development costs and because they generate demand for more intense, costly services even if they are not necessarily cost-effective. Longer life spans and chronic illnesses have placed tremendous demands on the health care system. It is estimated that health care costs for chronic disease treatment account for over 75 percent of the national health expenditures. Administrative costs of government health care programs and the net cost of private insurance make up 7 percent of health care expenditures. The mixed public-private system creates overhead costs and large profits that are also creating health care spending. (E Notes) The majority of the United States obtains health insurance through their employment, which is known as private insurance. Some employers do not offer insurance at all, while others pay anywhere from all to none of the insurance premium. Individuals may also purchase an individual health insurance policy. Growth in total
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