Are Soaring Healthcare Costs Asking Americans To Die? -Vincent Dinh, Eco 2

The rise of healthcare costs in the US is still a current economic issue, since several decades ago. With 90% of spending on healthcare costs, it is a large factor behind the countries’ expenditure and economic activity from businesses. This influences the decision and resource allocation of the economy. Is this a potential threat to the whole country?

There are many reasons for the high expenses but the primary ones include: the administration costs of running ,health services, drugs, diagnostic test and hospital services are more valuable.

The US provides healthcare from many public health coverages and private health insurance which include Medicare and Medicaid. These public services provided are ethical, but the high cost doesn’t sound appealing for many people specifically patients and business people.

Cost Breakdown

During 2016, America has reached a total expenditure of healthcare services at $3.3 trillion and has an anticipated rise of 5.5% each year which is equivalant to 18% of the GDP. The costs are so high that people “skipped medical care,” which causes anxiety and a major concern for everyone. Furthermore, 25% of families say that they skipped essential medical care because health costs are unaffordable.

“High cost of healthcare is an economic killer”

Healthcare cost in the US has escalated since around 1982 and has significantly progressed every year unlike other countries like France, Germany or Japan.

The US health facilities are largely run by private sectors and 21% by the government. The US is profit- motivated and uses the profit to benefit healthcare, unlike Australia where the government uses tax to support these facilities. In regards to resources, there can be a potential relative scarcity in healthcare because of limited resources in the future, which is understood in material terms such as a limited number of facilities, and the amount of blood/organs to be available. In a way, it makes sense for the cost rise for these services, but ethically patients should be prioritized.

This service requires a large quantity of capital resources (machines and devices), and labor resources (doctors and nurses). Consumer sovereignty has some contribution towards these high costs because of high consumer demand. Therefore these health organisations are taking advantage of the demand and raising the prices because it reflects on what consumers purchase.