Economics of Healthcare

Quality health rarely comes easily. Realizing a long and healthy life usually necessitates the input of limited resources and this makes it an economic concern. Approximately seventeen percent of the money spent in the United States economy goes to some type of health care service comprising expenditure on medical research experts, physicians, pharmaceutical drugs, nurses, hospitals and dentists (Feldstein, 2012). Because of this, understanding today’s economy will demand the acknowledgement of the distinctive economics of health care. This documentation will focus on the various aspects of the economics of healthcare.

The National Health Expenditure as a percent of GDP in the United States has been growing gradually over from the twenty century to the twenty-first century. Over the last thirty-three years, the NHE as a percentage of GDP grown from 7 percent in 1970, to 15.3 percent in 2003. When the nation’s GDP in healthcare high it implies that the nation is increasing the amount of production which is taking place in the economy and the citizens are spending more on care (Hartman et al., 2017). The high cost of healthcare can be supported by NHE per capita. Over the last decades, the NHE per capita has increased from $1,263 in 1970 to $5,330 in 2003. This indicates that the rate of healthcare in the U.S is constantly on the rise which implies that citizens have to pay more to attain health care services. From this trend, we can predict that the cost of healthcare will continue to increase in the future unless the government takes an initiative to prevent the rise of healthcare.

From the NHE data presented, the cost of medical care services has increased exponentially over the years. The health care cost is rising and many citizens are now unable to afford quality healthcare services. According to the latest report, the United States spends approximately $2.9 trillion each year that is roughly eighteen percent of the GDP and approximately 9,255 dollars per individual annually on cost of care (Mathur, Srivastava, Mehta, 2015). The continual rise in health care cost may be attributed to the growing and aging population. In addition to this there are a number of factors which increase the rate of health care including higher out-of-pocket cost and premiums, a growing number of people with chronic diseases and the increased cost of the emergency room and outpatient room care (Feldstein, 2012). The rising cost of health care implies that fewer people are now in a position to afford quality health services in the country.

The cost of hospital care has risen by 384.8 dollars between 1970 and 2003. During the same period, the cost of physician and clinical services has risen by $296.7. The cost of nursing home care has improved by $89 while the cost of home health care has grown by 36.9 dollars in the same period. The program administration fee has increased by $102.3, the cost of prescription drugs has increased exponentially by $148.4 and the cost of public health activities $45.5 between medical care services. The trends in the health care cost reveal that the cost of healthcare will continue to grow unless the government intervenes to include programs aimed at reducing the cost of care (Feldstein, 2012). There are a number of factors that underwrite the rising cost of care, they include growing and aging population. In addition to this, government programs such as Medicaid and Medicare have increased the demand for health care services which has increased the rate of care.