American Consumption of Health Services

(American Consumption of Health Services)

Student’s Name:

Institution of Affiliation:

Course Code + Course Title

Instructor’s Name:

Assignment Due Date:

American Consumption of Health Services

The United States spends more on healthcare than other developed countries. Comparing the US and German healthcare systems, for instance, there are significant disparities in the consumption of health. America has higher spending than Germany despite the German healthcare system being better. Healthcare spending in the US is rising and, if not addressed, will drive the country to an unsustainable national debt, making it harder to address public health issues. This paper discusses the American consumption of health as a healthcare system challenge and proposes interventions to minimize healthcare spending.

US Healthcare Spending

The US healthcare spending is among the highest in the world, spending over $4.3 trillion in 2021, which averages to about $12,900 per individual, double what individuals in other wealthy nations spend. Also, America spends a significant part of its GDP on healthcare, about 16.3% to 17.0%, compared to Germany, which spends roughly 11% of its GDP.¹ In 2021, the US spent 18% of the GDP, which is a significant increase from 5% in 1960.² The Covid-19 pandemic significantly increased healthcare spending in the United States, and it has since been increasing despite the size of the economy stagnating as US citizens grapple with significant inflation.

Multiple factors, including aging population, the increasing cost of healthcare services, and increasing drug addiction, such as the opioid pandemic, are increasing prices and utilization, hence the growing healthcare spending.¹ The aging population, comprising of older adults aged 65 years and above, has increased considerably over the past decade, from 13% in 2010 to 16% in 2021.⁴ This proportion is anticipated to continue increasing to about 20% by 2030.⁴ Older adults experience more health issues than the other generation; hence spending more than any other group. Therefore, the increasing population means that healthcare spending will continue to rise into the future if appropriate interventions are not adopted. Additionally, older people above 65 years will be eligible for Medicare, and the number of enrollees will rise significantly, increasing Medicare costs over time, projected to double by 2050 relative to the economic size, increasing from 2.9% in 2022 to 5.9% of GDP by 2052.⁴

Additionally, price increases and inflation are raising healthcare spending due to the increased cost of healthcare products and services. The cost of healthcare services is rising more than the cost of other goods and services. For instance, in the past two decades, the consumer price index (CPI) has experienced constant growth averaging 2.4% annually for other goods and 3.4% for medical care.⁵ The innovative healthcare technologies improve the quality of care, but also the cost of procedures and products; hence high healthcare spending. Per this evidence, it is fundamental to explore the high cost of healthcare because, despite the cost of healthcare increasing, the quality of health and health outcomes have not.

(American Consumption of Health Services)

There are several remedies to reduce healthcare spending, including promoting competition, focusing on preventative care, reducing service and product prices through regulation, establishing incentives to minimize the utilization of low-value care, developing spending targets, and fostering payment reforms.³Preventative care should be emphasized to avoid disease development in the first place; hence no need to seek healthcare services. Physician assistants can work closely with other providers to adopt preventative care measures, such as patient education and coaching of healthy habits and lifestyles, to reduce disease incidence and burden. Health policy commissions and policymakers should support these strategies through initiatives in current state and federal agencies and direct implementation of new policies. There are limits to federal action, and states should take more meaningful policy action to drive the reforms and control the spending in their respective states, which would hence reduce the nationwide spending growth. It can be possible through state health policy commissions.

Conclusion

American consumption of healthcare services is significantly higher than other wealthier and more developed countries. Individual spending is double that of other developed nations. The increasing spending is a concern because health outcomes have not improved. Reducing healthcare spending is possible through health policy reforms implemented at the state and federal levels and should not be left to the federal government only.

References

Dieleman JL, Cao J, Chapin A, et al. US Health Care Spending by Payer and Health Condition, 1996-2016. JAMA. 2020;323(9):863-884. doi:10.1001/jama.2020.0734

McCullough JM, Speer M, Magnan S, Fielding JE, Kindig D, Teutsch SM. Reduction in US Health Care Spending Required to Meet the Institute of Medicine’s 2030 Target. Am J Public Health. 2020;110(12):1735-1740. doi:10.2105/AJPH.2020.305793

National Academies of Sciences, Engineering, and Medicine. Factors that affect health-care utilization. InHealth-Care Utilization as a Proxy in Disability Determination 2019 Mar 1. National Academies Press (US).

Peter G. Peterson Foundation. Why are Americans paying more for healthcare? 2023. https://www.pgpf.org/2023/01/why-are-americans-paying-more-for-healthcare/

The Commonwealth Fund. Reducing Health Care Spending: What Tools Can States Leverage? 2021. https://www.commonwealthfund.org/publications/fund-reports/2021/aug/reducing-health-care-spending-what-tools-can-states-leverage

American Consumption of Health Services