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Health Care Spending Paper Essay

This paper will include: the current health care expenditures whether spending is too much or not enough, where the nation should add or cut, how the public’s health care needs are paid and provide a forecast for: the future economic needs, why these needs must be addressed, how I envision these needs will be financed and conclusion.

Current Health Expenditures

Health care costs have been rising for several years. Expenditures in the United States on health care surpassed $2.3 trillion in 2008, more than three times the $714 billion spent in 1990, and over eight times the $253 billion spent in 1980. Stemming this growth has become a major policy priority, as the government, employers, and consumers increasingly struggle to keep up with health care cost. Hospital spending, the largest share of overall health care spending, is a major driver of increased costs The current national expenditure have tripled over the last decade especially in hospital care, physician/clinical services and drug ( Kaiser, 2010). The United States is at an all time high in health care. In the health care system there are some factors that contribute to this increase. It is getting to the point that more and more Americans cannot afford health care, because of the cost of health care is getting harder to maintain for their families.

Whether Spending is too much or not enough

It is difficult to pin point one exact factor why spending is escalating. The chart below states that hospital care, physician/clinical services and prescription drugs are where the most spending is taking place (Kaiser, 2010). This shows we are spending too much, especially in these top three categories listed. When health care cost is steadily increasing, so we are spending a great deal in the list above.

National Health Expenditures, 2008 [pic]

Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group

Where the Nation Should Add or Cut

Medicare and Medicaid account for a significant share of health care spending (Kaiser, 2010) and also according to the above chart we could cut in the hospital care, physician/clinical services and prescription drugs. This is why we need to cut as far as the nation is concerned because these government programs Medicare and Medicaid are funding health cost at a steady growth. We have to work on controlling this program before it controls us. If we do not start cutting from somewhere we will be in a serious deficit for health care in the United States. Then we need to cut prescription drugs cost, so it can be affordable to everyone, so the government needs to intercede the pharmaceutical companies closely to manage this expense.

How the Public’s Health Care needs are Paid

Although Americans benefit from many of the investments in health care, the recent rapid cost growth, coupled with an overall economic slowdown and rising federal deficit, is placing great strains on the systems used to finance health care, including private employer-sponsored health insurance coverage and public insurance programs such as Medicare and Medicaid ( Kaiser, 2010 ). The public’s health care payments are paid by Medicaid and Medicare if eligible for this government health program and other private health insurance companies, for example: Blue cross and Blue Shield, Aetna, Cigna and United Health Care are just a few the public health care is paid. There are some people who pay out of pocket, whether they can afford it or not.

Forecast: the Future Economic needs

Scott Donahue, vice president of Triple Tree healthcare advisory group, agrees, pointing to statistics such as those found in the 2009 PricewaterhouseCoopers Health Research Institute study that revealed nearly one half of the $2.2 trillion the United States spends each year on healthcare is wasted. “While it is impossible to point to any single breakdown contributing to the waste, it is clear from the study’s findings that this is an industry that has significantly underutilized technology to improve efficiencies,” he says, adding that cloud computing could help mend a healthcare system that is stuck in the inefficiencies and limitations found in older legacy systems (Chavis, 2011).

There needs to be an investment in our technology system for health care for example: electronic medical records (EMR) to better serve the patients and technology that is being required to give quality service and modify the provider’s wages, since in the hospital this is the biggest cost. This is a start in the direction to accommodate the Americans who cannot afford health care. These small changes can contribute to a clear forecast in health care.

Forecast: why these needs must be address

This issue needs to be address because health care cost is soaring and if we do not intercept and make some real changes the American people will not afford medical services. The health provider’s and facilities are making big money and they need to work with the people to help with this expense we have made. The government can help by fine tuning the Medicare and Medicaid program, so people can benefit fairly from it. We need to get proactive in prevention, so we our bodies will stay healthy for a long life.

Forecast: how I envision these needs will be financed

I envision a new administration making some major changes to make health care affordable for all Americans. The private insurance companies will need to work on some alternative health care package to their consumers for health care cost. The government in Washington to stop thinking of them and focus on health care cost, so all can manage health expense and get continued quality care also.


The bottom line we need to concentrate on cutting cost of health care and quality care, which we all deserve as human beings. There is not just one factor that contributes to the health expenditure but several pieces to this puzzle that makes this a major health cost issue. We need to find ways to decrease spending too much, so people can benefit from their health plan. The nation should consider cutting hospital care, clinical services and prescription drugs, since these are the top expenses for health care. This would definitely clear a path for reduced cost. The public can barely afford to pay premiums to their private health insurance companies but if they want coverage they have to pay. The one’s who qualify for Medicare and Medicaid will get help from this government program for health care cost and yes some people still pay out of pocket to maintain their health conditions.

Technology is one investment to keep up with the growing health care needs of people. We must address these health cost concerns or they will get out of control, so we need to be proactive getting health care financially in shape to accommodate medical service to all. I envision that all people will be covered by health care regardless of economic background. Americans need to get resources to take better care of their health and invest in prevention, so our health will not result in a chronic illness or an incurable disease. Then maybe the law makers in Washington will make sound decision about our health care plan from other health care providers, so we can benefit and help with cost diminishing.


Access My Library. (2004). Health Care Spending Hits 1.6 Trillion in 2002, Rising More Than Twice as Fast as U.S. Economy. Retrieved from http://www.accessmylibrary.com/coms2/summary_0286-19942976_ITM

Chavis, S. (2011). Cloudy Forecast for Health. For the Record, 23(4), 10.

Getzen, T., Moore, J. (2007). Wiley Pathways health care Economics (1st. ed.). John Wiley & Sons.

Kaiser. (2010). U.S. Health Care Costs. Retrieved from http://www.kaiseredu.org/Issue- Modules/US-Health-Care-Costs/Background-Brief.aspx#.

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