Health Care Spending
Shannon Camacho
HCS440
December 15, 2014
Larry Gonzalez
Health Care Spending
Affordable health care is a major part of the American dream. This dream, long viewed as the most desirable lifestyle, is slowly turning into a nightmare with “42.6 million Americans uninsured including 10 million children” (govspot.com, 2012). The many flaws of the current health care system need to be addressed and changes must be made. These issues include the level of current nation health care expenditures, the amount that is being spent on health care, and how the public’s health care needs are paid for and financed by various payers.
The level of current nation health care expenditures sits at about $2.1 trillion. This translates into about $7,026 per person, and 16% of the Gross Domestic Product (GDP) (ajronline.org, 2008, pg. 1). Hospital spending encompasses about 31%, which is above the national health care expenditure average. Physician expenditures account for about 5.9%, which is currently lower than the overall expenditure rate due in great part to the 2% Medicare fee for physicians. Medicare part D, which caused a spike in prescription drugs, accounts for about 19%; administrative fees encompass 8.8%.
Heath care spending is at a staggering level, and only continues to grow; in other words, the health care growth rates exceed the overall gross domestic product (GDP), and eventually will surpass all other types of spending. National health care expenditures will not be sustainable, and the future health care system will be unable to run efficiently, if at all. In the private sector, Medicare has had a sufficient increase in Medicare Advantage, making managed care more important and placing the fee-for-service system at a great risk.
One method for halting the rise of health care spending is to stop fraudulent claims on Medicare and Medicaid. “The U.S. loses at least $60 billion to health-care fraud every year, and some estimates put the cost as high as 10% of the nation's total health-care spending, which exceeds $2 trillion (wsj.com, 2012, pg. 1)”. Claims exceeding 4.4 million are placed on Medicare a day, and $10 billion in claims were placed in the fiscal year that ended September 30, 2008 (wsj.com, 2012, pg. 3). Stricter laws need to be implemented in order to prevent hospitals and doctors from attaining money from Medicaid or Medicare for fraudulent claims and medication never performed or prescribed. Laws must be enforced to prevent Medicare and Medicaid fraud from occurring.
If the current health care expenditures continue to rise, the notion of affordable health care will no longer be possible. The nation must decide what should be added or cut in order to begin to make affordable health care for Americans a realistic, achievable goal. The nation “needs to be moving toward a system in which doctors and hospitals have incentives to provide the care that makes you better, rather than the care that just results in more tests and more days in [the] hospital (Orszag, 2009, pg. 1).” One way to fix this problem is to decrease the amount of time spent on hospital stays, unproven treatments, unnecessary tests, and overpriced drugs. “The U.S. spends more per capita, and the highest percentage of GDP, on healthcare than any other OECD country (Family, 2009, pg. 3).”
The public health insurance is paid for by a combination of both public and private insurance, with $2.6 trillion paid out in 2010 more than 10 times the $256 billion spent in 1980 (kaiseredu.org, 201, pg. 1). Citizens 65 and older qualify for Medicare, which is a federally funded government program to cover basic health care needs with no out-of- pocket expense. Medicare, however, does not pay for all medical services or drugs. Citizens under 65 who cannot afford insurance can turn to Chip or SCHIP, which is also a state-run program. Private health insurance is offered to employees through employers. This is the major source of health insurance