Unfortunately, for all the American overeaters, smokers, drinkers, risk takers, aging, and sick, along with anyone else that does or will require medical attention, it takes big bucks to pay for health care, and it is not getting any cheaper. With the baby boomers getting older the population is going to need health care now more than ever. The hospital stays, the procedures and surgeries, long-term care, the doctor and dentist visits, the medical supplies, and medications are hardly affordable. How will we pay for it and how much will we have to pay? Where will the money come from? Citizens, businesses, and the government are paying more and more for health care. Health care as a percent of the Gross Domestic Product (GDP) is growing and it is continuing to grow. After reviewing numerous reports and articles I will now try to recount some of the many multifaceted reasons for this growth and offer my thoughts on the subject.
The Underlying Dynamics of Health Care Spending
In their working paper, The Challenge of Financing Health Care in the Current Crisis: An Analysis Based on the OECD Data, Scherer & Devaux examine the variations of the health expenditure and the GDP ratio among different countries (2010). They presume that America “stands out as being a country for which increases in the health expenditure ratio have been largely associated with pauses or declines in GDP growth” (2010).This notion was reflected when the GDP decreased, as a consequence of the recent recession, from $14,369 billion in 2008 to $14,119 billion in 2009 (Centers for Medicare and Medicaid Services). Despite the decline in GDP, the National Health Expenditures (NHE) increased, amounting to $2.5 trillion and constituting 17.6 percent of the GDP in 2009 (Centers for Medicare and Medicaid Services, 2010). Statisticians and analysts are working to make all sorts of rate projections: the rate at which these changes will occur; the rate of economic growth; the rate of spending; basically, the rate of anything. However, history shows that unexpected events or actions taken that have serious negative ramifications may call for another complete reform.
There are a number of contributing factors that have caused the health care portion of the GDP to increase. Many analysts say the greatest source of increasing health care expenses is the costly medical technologies, drugs, and advanced treatment procedures that are being developed (Congressional Budget Office, 2008). Throughout the recession the cost of prescription drug costs and many medical services increased or stayed at the same high prices (Sisko, et.al., 2010). Additionally, the current economic situation and general inflation is causing health care spending to increase. Benjamin Sommers points out that if the United States does not find a way to curb the rate of growth in health care costs, “the nation’s ability to pay for nonhealth goods and services—such as education, infrastructure and consumer...