Healthcare Spending Paper

Health Care Spending

Abby Gilliam, Barbara Gomez, Brenda Jordan, Carmen Edinburgh, Denise Peters

HCS/440

10 October 2016

Humberto Munoz

Health Care Spending

        The U.S. Department of Health and Human Services (HHS) has published data regarding the total national health expenditures annually since 1964 (Centers for Medicare & Medicaid Services, 2016). The data is referred to as the National Health Expenditure Accounts (NHEA), and is compiled to measure the total amount of health care consumption annually in the U.S. It also references the total sum that is invested in medical structures and equipment research to procure health services in the future (Centers for Medicare & Medicaid Services, 2016). The NHEA measures the expenses of health care goods and services, the net cost of health insurance, public health activities, government administration, and any investments related to health care (Centers for Medicare & Medicaid Services, 2016). The information is sorted by the sources of funding, type of sponsor and the type of service provided (Centers for Medicare & Medicaid Services, 2016).  

Current Health Care Expenses

According to the Centers for Medicare and Medicaid Services, “In 2014, U.S. health care spending increased 5.3 percent following growth of 2.9 percent in 2013, to reach $3.0 trillion, or $9,523 per person,” (Centers for Medicare & Medicaid Services, 2016). The prominent coverage changes under the Affordable Care Act fostered a rapid growth in United States healthcare spending in 2014, particularly for Medicaid and private health insurance. The spending increased 4.1 percent, $971.8 billion in 2014, in comparison to the 3.5 percent growth in 2013 for hospital care (Centers for Medicare & Medicaid Services, 2016). The physician and clinical services spending also increased to 4.6 percent, $603.7 billion, from 2.5 percent growth in 2013. Other professional services reached a spending point increase of 5.2 percent, equivalent to $84.4 billion, whereas in 2013, it only increased from 3.5 percent (Centers for Medicare & Medicaid Services, 2016).      

In 2014, households and the federal government each accounted for the largest shares of spending at 28 percent; which were followed by private businesses at 20 percent, state and local governments were at 17 percent (Centers for Medicare & Medicaid Services, 2016).   “Household spending grew 2.0 percent in 2014—about the same rate as in 2013 (1.9 percent). Households continue to be the largest sponsor of health care at 28 percent, however, their share decreased from 29 percent in 2013,” (Centers for Medicare & Medicaid Services, 2016). Growth in expenditures for all other sponsors of health care were surpassed by the increases of federal government spending in 2014, increasing to 11.7 percent compared to the 3.5 percent in 2013 (Centers for Medicare & Medicaid Services, 2016).  

Appropriate Level of Spending

Health care spending is one of many topics that are spoken about almost daily. The Affordable Care Act was enacted to enable many Americans to have the ability to gain access to health care coverage. The questions lies as to decide whether medical spending to much, or simply lower than what it should be. With this question, the focus will have to be on who is receiving the health care. For those Americans who have gained access to health care for the first time, their main issue is that they felt as if they were unable to receive proper care when needed without slipping into excessive care. For those Americans who have had health care coverage, their issues are much greater being that "they are receiving too much healthcare" (Cruz 2013, p.1). According to the Institute of Medicine, approximately 30 percent of the total health care expenditures go toward unneeded care in America. While analyzing the given information on healthcare spending, the idea of extreme care typically takes the form of overabundant referrals to a specialist, more diagnostic test and or to many prescription medications. Many physicians placed in a position of overutilization in fear of facing legal challenges. The healthcare system was organized to adhere to and meet the needs of individuals that are in need of health care services. However, to be able to distinguish if the spending is too much or not enough will be hard to diagnose because the medical needs of an individual or a family differ I many ways. The estimation of health care spending is primarily sponsored by businesses, households, and Governments across the nation. Based on the Gross Domestic Product (GDP), 17 percent of the nation's share of health care expenditures is accounted for in health spending (CMS 2015).

Areas to Increase or Cut Spending

America's healthcare cost continues to be a challenge, and the “National health spending is projected to continue to grow faster than the economy” (Marcus 2012, p. 2). The estimated cost that the United States spends in a year is more than $2 trillion dollars. One of the many areas that tend to impact the nation’s budget is the “spending on expensive new technologies and treatments” (Kuehn 2014, p. 1). The key to preserving the Nation's financial health has identified as having the ability to curb the cost. In order to cut the cost of a plan, the decision has to be made early in the development of treatment so that the focus of reducing the utilization of expensive treatment will be noted early. According to Garber, a policy has been updated and finalized along with implementing the financial incentives of the Nation's spending expenditure assist with creating interventions that encourage health and reduces health spending. The Nation should invest in cost-effective plans that will increase the quality of many healthcare services. A collaboration of Centers for Medicare and Medicaid Services and United States Food and Drug Administration on the focus of coordinating policies that promote cost-saving treatments will help with discouraging the use of costly therapies.

Means of Paying for Public Health Care

As we already know that the people of America have the right to have the option of private health insurance or insurance that is government ran. Insurance that is ran by the Government however, equals higher tax payments to the people of America. When the responsibility is given to the insurance companies, it tends to allow them to operate with very few rules and regulations (Office of the president, 2014). When President Obama started Obama care, it was meant to form somewhat of a balance between private insured and government insured citizens. Through Obama care employers were strengthened because they could offer more coverage and make the insurance companies accountable. The new actions had helped to ensure the patient’s choice of doctors and keep government interferences to a minimum (Office of the president, 2014). Today, patients are able to make their own healthcare decisions with the doctors of their choice rather than being forced to go through the insurance companies’ choice. The major benefit that this type of plan offered is that the healthcare costs for each person has been reduced by $2,500 per year. The few Americans who still do not have any health insurance have the option of selecting an insurance plan from a more affordable range of healthcare insurance options (Office of the president, 2014).