Health Care United States' National Term Paper

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This situation was also due to slower growth in prescription drugs. Other categories that reported slower growth include: physician and clinical services, home health care, and other professional services.

Regarding prescription drug spending, the value increased 5.8%. For the previous year, the increase was of 8.6%. The reason for this category's evolution is Medicare drug spending significant deceleration, along with generic drugs increased use. Use of brand name drugs was slowed down by a proliferation of tiered-copayment benefit plans. Also, the number of new drugs introduced on the market was lower than previous years. However, out-of-pocket spending for drugs has increased higher than private health insurance spending has.

Hospital spending is probably the most important category of national health care expenditures, as it represents almost one third of total health care spending, and 31% of national health expenditures. Hospital spending has increased 7.9% in 2005, the same value reported for the previous year. Hospital spending by private payers increased 7.6%, while hospital spending by public payers increased 8.1%.

The physician and clinical services category decelerated from 7.4% increase in 2004 to 7% increase in 2005. In addition to this, public spending growth decelerated from 9.1% in 2004 to 8.1% in 2005. This situation was determined by Medicaid spending deceleration regarding physician and clinical services mentioned above, and also Medicare deceleration in the same category of expenditures.

One of the categories that increased in 2005 is represented by nursing home. The increase was of 6%. Approximately 44% of skilled nursing facilities funding is covered by Medicaid, whose spending for nursing home services increased 3.9%.

However, the fastest growing category is represented by home health spending that increased 11%. Home health services public spending that accounts for approximately 75% of such spending increased 12.4%. Medicare that pays for approximately 37.7% of home health care service increased 10.7% (CMS, 2007).
Health care spending is expected to remain at a constant value of 16% of GDP. However, by 2016, health care spending is expected to reach $4.1 trillion and 19.6% of GDP (CMS, 2007). The following table presents health care expenditures for the United States for the following years:

Health Care Expenditures Projections


National Health Expenditures

Percentage of GDP

National Health Expenditures per capita

Note: the National Health Expenditures values are expressed in billions USD.

Source: Health and Human Services Department.

As a consequence, public personal health care spending should increase, while private personal health care spending should be cut down. Given the latest evolution regarding out-of-pocket spending, this category should increase. Also, due to the population's state of health reporting more and more cases regarding cardiovascular diseases, central nervous system, endocrine diseases, and diabetes, prescription drug spending should significantly increase.

Health care needs are paid from the following sources: Medicare 17%, Medicaid and SCHIP 16%, other public (like: programs such as workers' compensation, public health activity, Department of Defense, Department of Veterans Affairs, Indian Health Service, State and local hospital subsidies, and school health) 13%, out-of-pocket 13%, private insurance 35%, other private (including industrial in-plant, privately funded construction, and non-patient revenues) 7%.

As described above, health care costs are mainly supported by businesses, households, and governments paying insurance premiums, out-of-pocket costs, taxes, or general revenues (CMS, 2007). The percentage of health care spending paid by private businesses has remained at a constant level for the past two decades of approximately 26%. The percentage of this spending paid by households has decreased from 39% in 1987 to 31% in 2005. The percentage of this spending covered by governmental funding increased to one third of federal spending.

Reference List

National Health Expenditures (2007). Centers for Medicare and Medicaid Services. U.S. Department.....

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