The United States overall provides high quality health care, to the population. However, despite major breakthroughs in medicine, experts believe the present health care delivery system is broken and must be reformed. Major problems that lead to enactment of the Patient Protection and Affordable Care Act in March 2010 include the following:
- Rising health care expenditures.]
- Large number of uninsured in the population.
- Uneven quality of medical care.
- Considerable waste and inefficiency.
- Defects in financing health care.
- Abusive insurer practices.
Rising Health Care Expenditures; Total health care expenditures in the United States have increased substantially over time and are growing faster than the national economy. According to the Centers for Medicare and Medicaid Services., estimated normal health expenditures totaled just over $2.8 trillion in 2012 or 17.6 percent of the nation’s gross domestic product. Thus, more than one in six dollars of the nation’s income is now spent on health care. If present trends continue, estimated national health expenditures will total $4.6 trillion in 2020,. or 19.8 percent of our gross domestic product.
Comparison with Foreign Nations; The United States leads the world in total spending on health care. Per capita spending on health care in the United States was $7598 in 2009, or 48 percent higher than the second highest spending country and almost 90 percent higher than in many countries considered to be global competitors.
According to a recent study by the Common wealth Fund, the higher spending in the United States should not be attributed to higher incomes, an older population or a greater supply or utilization of physicians and hospitals. Instead, the higher spending may be due to higher prices paid for medical care, including prescriptions drugs, office visits and higher physician and surgeon fees compared to foreign country, greater use of more expensive technology and higher obesity rates. Despite higher spending the quality of health care in United States shows considerable variations of performance depending on the disease being treated and does not appear to be markedly superior to less costly systems in to other industrialized countries.
Reasons for the the Increase in Health care Expenditures; Health care economists have identified numerous factors that explain at least in part the substantial increase in health care expenditures over time. Important factors include the following;
- Increase in consumer demand. Consumer demand for health care services has increased over time because of an insurance in the population, rising per capita incomes, and greater health awareness by Americans. Studies suggest that growth in average per capita income could account for 5 percent to approximately 20 percent of the growth in long-term spending on health care.
- Advances in technology. Development of new technology and advances in existing technology are major drivers of health care costs in the United States. Examples include magnetic resonance imaging, coronary bypass procedures, bone marrow transplants etc.
- Cost insulation because of third-party payers.
- Employment based health insurance.
- State mandated benefits. The states require health insurers to cover certain specific diseases or groups such as coverage of newly born infants.
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