Healthcare Articles
In 1965, the United States spent approximately 6% of its Gross Domestic Product (GDP) on health care. By early in the 21st century, spending on health care had risen to nearly 15% of the GDP, and is projected to increase further to approximate 19% by 2015.
We must all be aware of and understand that the rising of health care costs is due to many factors. Increases in the number of and the aging population, increases in the number of people with chronic disease, the availability of high-cost technologies and new treatments, increasing labor costs in health care, liability insurance costs, and the ever changing lifestyles, eating habits and environmental influences.
The continual and ever increasing costs associated with healthcare which comprises an increasing percent of our country's GDP is reason why we must find solutions to curtail its rise.
Most industrialized nations spend a smaller percentage of their GDP on health care with better health outcomes as measured by the World Health Organization.
Approximately 50% of health care in the United States is paid for through employer-sponsored health insurance, and most of the remainder is subsidized by the two large public insurance programs, Medicare, which covers care for the elderly and disabled, and Medicaid, which encompasses care for the poor and medically indigent. Medicare Part A covers hospital services and is federally funded at no cost to the consumer. Medicare Part B covers physician services and is federally funded, but consumers pay a monthly premium. Medicaid is funded jointly by the federal government and the states; each state administers its own Medicaid program, which results in varied benefits and qualifying income levels across states. Various other public subsidization programs have been designed by states to supplement this financing system.
Cost control has been increasingly important on the health policy agenda. In 1982, Medicare's Prospective Payment System implemented diagnosis-related groups to establish charges for hospital admission. Soon after, the Resource-Based Relative Value Scale system was implemented to align physician payments with estimated costs for services. In the 1980s and 1990s, health maintenance organizations also proliferated in commercial insurance and in the Medicaid and Medicare programs to lower costs by attempting to reduce inefficiencies and improve coordination of care. In the late 1990s, consumers and providers rebelled against control mechanisms, such as prior-authorization programs, referral forms, and payment denials resulting from utilization management. Today, although health maintenance organizations continue to exist and almost all care is managed to some degree, the prevailing insurance model is the preferred provider organization, which offers consumers a relatively unrestricted choice of providers, with a financial incentive (lower out-of-pocket payments) if they seek care from network providers selected by the insurer based on cost and/or quality criteria.