Global Health
According to Raghupathi et al. (2020), healthcare expenditure can result in better
provision of health opportunities, which can strengthen human capital and improve the
productivity, thereby contributing to economic performance. It is therefore important to
assess the phenomenon of healthcare spending in a country. Healthcare spending and the
impact that it has on economic performance are important considerations in an economy.
Some studies have shown that improvements in health can lead to an increase in Gross
Domestic Product (GDP) and vice versa. Healthcare holds a significant place in the quality of
human capital. The increased expenditure in healthcare increases the productivity of human
capital, thus making a positive contribution to economic growth. However, there is ongoing
debate on what kinds of healthcare spending and what level of optimal spending is beneficial
for economic development.
Moreover, Kearney et al. (2021) stated that as the COVID-19 pandemic has dragged on
and much of the national health care discussion has focused on hospital capacity, health care
worker burnout, COVID-19 vaccination, and other measures to protect public health, the high
cost of health care continues to be a burden on U.S. families. Many U.S. adults have
difficulty affording various health care and dental costs. The cost of health care often
prevents people from getting needed care or filling prescriptions. Half of U.S. adults say they
put off or skipped some sort of health care or dental care in the past year because of the cost.
Three in ten (29%) also report not taking their medicines as prescribed at some point in the
past year because of the cost. High health care costs disproportionately affect uninsured
adults, Black and Hispanic adults, and those with lower incomes. Larger shares of U.S. adults
in each of these groups report difficulty affording various types of care and delaying or
forgoing medical care due to the cost.
The Investopedia Team (2022) mentioned that high cost of healthcare affects everyone,
sick or well. It has depressed individual spending power for the past few decades. Salaries for
American workers have risen, but net pay has stayed the same because of increasing charges
for health insurance.4 Today, tightening up on overspending is urgent to help stretch medical
and hospital resources to deal with the pressure on the overall system. Americans pay almost
four times as much for pharmaceutical drugs as citizens of other developed countries. One
reason for high costs is administrative waste. Providers face a huge array of usage and billing
requirements from multiple payers, which makes it necessary to hire costly administrative
help for billing and reimbursements.
Americans spend vast sums on health care. Certainly, health care is expensive all over the
world, and it makes good sense for rich countries to spend large amounts to extend their
citizens’ lives and to reduce pain and suffering. But America does this about as badly as it is
possible to imagine. Health care can sometimes harm people, through medical mistakes, or
the over-prescription of opioids but there is also harm to people’s lives from its extraordinary
and unnecessary costs. The percentage of national income that is absorbed by health care has
grown over the past half-century, from 5% in 1960 to 18% in 2017, reducing what is
available for anything else from 95% in 1960 to 82% today. The costs of health care
contribute to the long-term stagnation in wages; to fewer good jobs, especially for less
educated workers; and to rising income inequality. Health care costs directly hurt those
without insurance, while those who are insured must pay co-payments, deductibles and
employee contributions. Health costs also affect federal and state governments, which pay for
Medicare and Medicaid (Case and Deaton, 2020).
Peter G. Peterson Foundation (2022) claimed that prices are another significant driver of
healthcare spending in the United States; the cost of healthcare services typically grow faster
than the cost of other goods and services in the economy. In the past 20 years, the Consumer
Price Index (CPI) stated that the average change in prices paid by urban consumers for
various goods and services and has grown at an average of 2.1 percent per year while the CPI
for medical care has grown at an average rate of 3.5 percent per year. High healthcare costs
put pressure on an already strained fiscal situation and are one of the primary drivers of the
long-term structural imbalance between spending and revenues that is built into the country’s
budget.
REFERENCES
[1] “Healthcare Expenditure and Economic Performance: Insights From ...”, 13-May-
2020. [Online]. Available: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7237575/.
[Accessed: 14-Mar.-2022].
[2] “Americans”, 14-Dec.-2021. [Online]. Available:
https://www.kff.org/health-costs/issue-brief/americans-challenges-with-health-care-costs/.
[Accessed: 14-Mar.-2022].
[3] “6 Reasons Healthcare Is So Expensive in the U.S.”, 31-Jan.-2022. [Online].
Available: https://www.investopedia.com/articles/personal-finance/080615/6-reasons-
healthcare-so-expensive-us.asp. [Accessed: 14-Mar.-2022].
[4] “How Healthcare Costs Hurt American Workers and Benefit the Wealthy”. .
[5] “Why Are Americans Paying More for Healthcare?”, 16-Feb.-2022. [Online].
Available: https://www.pgpf.org/blog/2022/02/why-are-americans-paying-more-for-
healthcare. [Accessed: 14-Mar.-2022].
