Understanding expenditures and sources of funds for health services organizations

Health Services Organizations

Broadly defined, Health Services Organizations are the delivery systems through which health care services are administered to patients. 2009 saw a continued increase of national health care spending to "$2.5 trillion, or $8,086 per person, and accounted for 17.6% of Gross Domestic Product (Centers for Medicare and Medicaid Services. 2009). Hospital care and physician and clinical service represent the two largest components of national health care spending at 759.1 billion and 505.9 billion respectively in 2009 (Centers for Medicare and Medicaid Services. N.D.). The trend of health care spending in the U.S. over the course of the past decades is particularly alarming, as expenditures "have consistently grown faster than the economy overall since the 1960s, rising about 2.4 percentage points faster than GDP since 1970 (Kaiser Family Foundation. March 2009). The future trends also point to health care spending continuing its upward trajectory, as "Centers for Medicare and Medicaid Services project that by 2018, health care spending will be over $4.3 trillion or $13,100 per resident, and account for 20.3% of GDP" (Kaiser Family Foundation. March 2009). The implications of increasing health care costs for consumers and providers in the areas of: patient access, affordability, coverage, and services offered will be critically important to the long-term health and vibrancy of the U.S. economy.

Percentage of Health Expenditures

Health care spending for hospital care represents 31% of total expenditures, while physicians and clinical service tallies 20% of expenditure. Together these two items comprise a majority 51% of all health care spending in 2009. Moving forward the Centers for Medicare and Medicaid Services (CMS) project that "spending on hospital services will account for average growth of 6.1% per year from 2009-2019" (Centers for Medicare and Medicaid Services. 2009). Likewise CMS projects "spending on physician and clinical services to grow on average 5.4% per year for the entire projection period." (Centers for Medicare and Medicaid Services. 2009).

Sources of Funds

The current funding climate on "health spending is fairly evenly split between the private and public sectors, with private health spending accounting for 54% of total health spending in 2007" (Kaiser Family Foundation. March 2009). Taken in totality, health insurance accounts for 71% of all funding sources with a categorical breakdown of: private health insurance at 32% of total spending, Medicare, 20%, Medicaid 15%, and other government programs four percent. Additionally 12% of funds flow from out-of-pocket programs, while other third party and investment programs account for 13%" (Centers for Medicare and Medicaid Services. 2009).