National Health Care Spending In The United Essay

Length: 6 pages Sources: 3 Subject: Healthcare Type: Essay Paper: #44883846 Related Topics: Critical Care, Health And Wellness, Cardiovascular System, Health Care Economics
Excerpt from Essay :

National Health Care Spending in the United States

For several years now, health care spending in the U.S. has been on the rise. In that regard, containing the situation has become a major headache not only for the government but also for consumers and employees looking for ways of keeping up with raising costs. In this text, I explain my position on the national health care spending in the U.S. In so doing, I will review the current health care expenditures at the national level and whether the same can be said to be sufficient or insufficient. Further, I will also make recommendations on where in my own opinion additions or cuts seem necessary. Next, I will discuss how the health care needs of the public are paid for. This paper will also provide a forecast of the various health care system needs going forward and why it is necessary to address them. In this context, I will discuss how these needs will be financed from my own point-of-view.

National Health Care Spending in the United States

Currently, the level of national health care expenditure in the U.S. stands at approximately $882 billion (Chantrill, 2011). Cost centers in this case include but are not limited to public health services, medical services, Medicare and welfare. It should be noted that Medicare currently claims the largest chunk in terms of expenditures with approximately $494 billion dollars being allocated to the cost center. Medical service receives the lowest allocation of approximately $1 billion dollars. In my own opinion, the amount allocated to medical service seems insufficient given the figure the government is spending on welfare payments. Looking at these figures, the current level of spending on health care is only surpassed by national defense expenditure. The most recent data on federal government spending puts the defense expenditure at $964 billion dollars (Chantrill, 2011). In my own opinion, this is an indicator that the government could be getting its priorities wrong. Given the relevance of health care to the general prosperity of a nation, spending on this critical area should be at the top of the list. Indeed, it is quite in order to say that in one way or the other, the economic prosperity of a nation is largely pegged on the quality of health services and related policies.

Looking at the current national health care expenditure figures, it seems as if some critical areas that need more funding are left out. For instance, the $36 billion dollars allocation to R&D health seems grossly insufficient given the relevance of the cost center. In my own opinion, the federal government should consider raising the level of funding in this particular area as R&D remains one of the most important undertakings as far as health care is concerned. More money also needs to be allocated to Medical service (seniors). The funds to finance the areas I recommend for additional funding in this case could be sourced from welfare which has an allocation of $347 billion dollars. This in my opinion is more than enough for that particular area. For instance, a 5% cut on welfare spending would bring about a total saving of approximately $17.35 billion dollars which can be used in other areas including but of course not limited to R&D and training. My assertion in this case is hinged on the popular view that in some instances, government assistance could end up being abused. Hence with that in mind, there is an existing need to put in place limits on how much cash the government should spend (annually) on welfare. More money in my opinion should also be allocated to other supportive undertakings such as availing grants to medical training students. I am also convinced that there is a ripple effect of sorts which comes about when more spending is allocated to the construction of new health centers. The benefits that could accrue in this case include the creation of more jobs as such facilities need to be staffed. This effectively reduces the rates...


In basic terms, financing Obama's health care bill will be undertaken mainly through instituting Medicare net cuts and formulating a tax increase (Medicare) for taxpayers considered high-income. To put this into perspective, it should be noted that a total of $416.5 billion dollars will be sliced from Medicare. This represents a significant percentage (39%) of the cost of the bill over a period of 10 years. Effectively, this will bring about some significant changes to Medicare Advantage. Some of these changes include but are not in any way limited to an introduction of fee-for-service rates. Further, key adjustments will be instituted in regard to home health care. It can also be noted that the public health care needs will be paid for by adjusting Medicare tax on the earnings of those categorized as high income earners. This will make a total contribution of approximately $210 billion to the health care bill. Further, it is expected that approximately $45 billion dollars will be sourced from net cuts on Medicaid. In percentage terms, this is approximately 19% of the total cost of the legislation. Medical producers as well as insurers are expected to make a contribution of approximately $107 billion dollars to the bill by way of fees. When it comes to the total cost of the bill, this will account for approximately 10% of the same. Cadillac health plans will also make a contribution of approximately $32 billion dollars which comes to approximately 3% of the total cost of the bill. The contribution in this case will be made through excise tax. Further, it can be noted that approximately $69 billion dollars is expected to be sourced from employer and individual penalty payments. This is about 6% of the bill's cost. These are some of the main approaches that will be adopted to finance Obama's health care bill which stood at $938 billion dollars. Much of the data I present above is sourced from the Tax Foundation (2010), an organization that concerns itself with monitoring policy (fiscal) at various level sie. local, state and federal levels.

When it comes to forecasting the health care system's future economic needs, it can be noted that the impact of the recent downturn in economic activities will still be felt for quite a while going forward. In my opinion, the recession pushed more families towards seeking government assistance and hence it is highly likely that more money will be allocated to welfare going forward. Further, it should be noted that the there is an existing and urgent need to contain health care expenditures which as I have noted in the introductory section have been on an upward trend in the recent past. With that in mind, effective cost control seems to be the only approach left to effectively address the health care system's future economic needs. However, before embarking on cost control initiatives, it would be prudent for anybody forecasting the health care system's economic needs going forward to understand what is driving the gradual cost increments. Some of the drivers in this case include the costs of caring for the rapidly increasing aged population, increasing administrative costs, greater chronic illnesses prevalence etc. Hence in my opinion, future needs will be addressed effectively through a thorough understanding of the factors at play as well as by way of embracing innovative approaches aimed at addressing existing and emerging issues.

In my own opinion, the health care system needs to embrace and invest in information technology as a cost containment measure. This will have the actual effect of bringing down overhead costs through the effective sharing of information amongst other things. Fortunately, this is an issue that has been given some attention in the health reform plan. More attention also needs to be given to disease prevention initiatives. In my opinion, disease prevention programs could bring about cost reductions as chronic diseases seem to overburden the health care system. According to Healey and Lesneski (2011), a huge chunk of total health care costs go towards the maintenance of chronic diseases. Hence coordinated efforts to contain chronic diseases i.e. cardiovascular ailments and diabetes through funding wellness programs could bring about significant cost savings in the future. It can be noted that going forward, it is highly likely that costs will continue to be a critical consideration in a majority of debates deliberating on how to address the future economic needs of the health care system.

Based on the above analysis, it is clear that I favor the containment of costs as a way of seeking more funds to finance the future needs (economic) of the health care system. However, the government can still use or utilize several other approaches at the same time to attain the same objective. For instance, cuts as well as adjustments to other programs could be undertaken alongside cost…

Sources Used in Documents:


Chantrill, C. (2011). U.S. Healthcare Spending. Retrieved September 22, 2011, from

Healey, B.J. & Lesneski, C.D. (2011). Transforming Public Health Practice: Leadership and Management Essentials. John Willey and Sons.

The Tax Foundation (2010). Net Cuts to Medicare, Increased Medicare Tax on High-Income Earners Comprise Bulk of Funding. Retrieved from

Cite this Document:

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"National Health Care Spending In The United", 25 September 2011, Accessed.14 June. 2021,

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