In recent years, matters regarding healthcare have assumed a great prominence in both public and private discourse. Specifically, the ambit of national healthcare spending has been significantly controversial and increasingly emotive due to the various hardline positions taken by various persons and entities. This submission seeks to focus on national healthcare spending in the United States by highlighting a number of issues that have characterized the debate on this emotive yet important topic.
It is without question that there has been a significant increase in the amounts of money and resources spent in national healthcare. This could be attributed to many factors among them the growth in the population as well as the increase in lifestyle diseases which are relatively expensive to treat. As at the end of 2012, the national healthcare expenditure of the United States had hit the $3 trillion dollar mark and there are all indications that this is a figure which is bound to rise further if no bold decisions and urgent steps are taken to keep it in check. Indeed, this figure is so large that in some quarters it is viewed from the same lenses as debts owed by the government . The main reasons that can be attributed to this high level of national healthcare expenditure include the fact that the system primarily focuses on high rewards to expensive procedures and specialties but not preventive or primary care. Bad dietary habits by the citizens where there is an increased preference for fast foods which are accompanied by attendant complications such as obesity. Additionally, the fact that at least thirty million Americans are added to the insured healthcare system further pushes up the costs. High costs are also incurred in treating the increasingly aging population as well to treat such diseases that arise from bad addictive habits such as smoking . Indeed, at 20%, smoking is the leading cause of preventable death in the United States.
Without an iota of doubt, the current level of national healthcare spending is too much, way too much to be sustainable for the economy to remain competitive. Indeed among the countries in the Organization for Economic Development and Corporation (OECD), the United States spends much more in healthcare expenditure as compared to these countries . The United States with a per capita income of 7285 dollars spends 15.7% of its annual Gross Domestic Product (GDP) on healthcare expenditure. The closest to this is France with an annual spending of 11% of GDP on healthcare while the lowest among the OECD countries is Ireland which spends of 7.5% of its GDP on healthcare. From the above statistics, it is evident that the national healthcare expenditure high.
In light of these statistics, there is an urgent need for cuts in the national healthcare spending. The fundamental question then arises, where will these cuts come from? Where can the government make cuts to make savings without necessarily hurting other areas of the economy? Before discussing the specifics of where cuts should be made, it would be important to address the question why these cuts should be made in the first place. As earlier indicated, the cuts are necessary if the United States is to remain competitive in the global economy. Secondly, if the ballooning costs of national healthcare expenditure are not kept in check, there is a big risk that other sectors of the economy which equally require funding may be greatly disadvantaged. This may ultimately result in irreversible damage. Global warming and green energy could be used illustratively.
The first step in reducing these costs would be to reduce the number of healthcare providers and healthcare insurance companies in the United States. Going hand in hand with reduction in the number of healthcare providers would be an increase in the amounts spent in Medicare which is the largest government health insurance and which arguably runs relatively smoothly compared to the privately run healthcare schemes. There is equally need to transfer more resources to preventive medicine as compared to focusing on curative medicine. In the long run, this will lead to a reduction in costs.
The public healthcare needs are financed by various payers. These include the federal government which finances 45% of these needs. This leaves out about 47 million Americans who depend on private providers and thus in essence have to dip into their pockets to pay for their healthcare needs.
What does the future hold for the economic needs of the healthcare system of the United States? With the increasing aging population and the attendant diseases of old age, it is inevitable that this will result in greater costs for the healthcare system. The economic needs of the healthcare system in the Unites States will also be significantly affected in a negative way by the sharp increase in incidences of lifestyle diseases. This include such diseases as diabetes as well certain types of cancer which are directly attributable to personal habits. Indeed reports indicate that as at 2012, 34% of Americans were obese and this is a figure which in increasing. Analysts have also argued that universal coverage will be enacted nationally or in a majority of the states. However, at the same time, there will be an increase in the transfer of financial responsibility with regard to healthcare to individuals rather than such costs being borne by either the federal or state government . The above highlighted matters point to a bleak future for the economic situation of the health system of the United States. There is thus need to identify ways to address these potential challenges before they become actual problems. These needs must be addressed primarily for the purpose of ensuring that generally, the nation will be healthier in the years to come by as compared to the situation now. These needs must also be addressed so as to increase on savings as far as healthcare expenditure in concerned. This is the ideal situation which is contrary to what we have now where the national healthcare expenditure is increasing annually with no signs of stopping. Third and most importantly these needs must be addressed if the United States is to lower the percentage of GDP spent on national healthcare expenditure from the current 15% to a figure below 10% as is the case with most of the countries in the Organization for Economic Cooperation and Development .
There are a number of ways which can be adopted to finance the expected increase in economic needs of the healthcare system. First and foremost would be through the cutting of unnecessary government expenditure in both federal and state governments and using the moneys saved to finance the new economic costs. With the imminent withdrawal of the troops from Afghanistan in 2014, cuts in defence budget would be justifiable. The moneys realized from the cuts in the military budget can also be channeled towards financing the increasing economic needs of the healthcare system. Thirdly, the tax regime can be revised so as to find possible loopholes which can then be sealed resulting in more revenues for the government. Such funds can equally be channeled towards meeting the future economic needs of the healthcare system.
In conclusion, the spiraling healthcare costs are a cause for alarm both for the government and to individual citizens who love their country and would love to see it continue prospering. There is thus need for a concerted effort by actors in both the public and private sector to stem this tide before it blows out of proportion. This can be done and should be done.
Council of Economic Advisors. (2009, June 2nd). Healthcare Report.pdf. Retrieved March 13th, 2013, from Whitehouse Website: http://www.whitehouse.gov/assets/documents/CEA_Health_Care_Report.pdf
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