Is Healthcare Hurting the US Economy?

Julie Shenkman
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Thanks to the Affordable Care Act, millions of Americans now have access to healthcare coverage; and healthcare spending is at an all-time high. Healthcare plans are now more affordable, accept pre-existing conditions and are expanding coverage options through employers around the United States. Many believed that access to healthcare would in fact lower healthcare costs — but thus far, healthcare spending in the United States has tripled.

More access to healthcare means that the healthcare industry is booming with employment. In fact, in 2013, healthcare was one of the only sectors offering jobs in the financial crisis. However, by the same token, healthcare costs in the United States have tripled since 1990. In 2012, healthcare spending in the United States accounted for 12.5 percent of gross domestic product. In 2014, healthcare now accounts for 17.9 percent GDP, which makes the United States the highest spender in healthcare compared to France’s 11.7 percent and Germany’s 11.3 percent.

Moreover, the United States’ healthcare spending isn’t efficient. The U.S. ranked in the bottom five percent for healthcare spending efficiency. This means that unlike other industries such as manufacturing, the money spent on healthcare doesn't add much of anything to the economy. On average, the United States spends about $8,915 on healthcare for every insured American. Per capita, the U.S. spends more on healthcare than 46 other countries — but only has a life expectancy of 78.6. The amount that the United States spends on healthcare is greater than Russia’s GDP.

With increased access to medical treatment, people are now visiting the emergency room more. Additionally, studies across the country are finding that surgeries are increasing. Patients are now taking advantage of their healthcare by filling prescriptions and going to the doctor more frequently. Prescriptions, exams, surgeries, emergency room visits and expensive treatments all add up.

While many believe that preventative measures reduce healthcare spending because the government isn’t paying for expensive surgeries later, studies are beginning to show the opposite. In fact, many argue that until further reform is introduced, healthcare spending will only continue to climb as newly insured patients begin to take full advantage of their insurance. Some of the increased costs come from poor decisions made by patients, such as visiting expensive emergency rooms rather than contacting their primary physician after hours.

Though the dropping unemployment is a great sign of a recovering economy and more people have access to much-needed medical care, the Affordable Care Act in and of itself is proving to be extremely costly. Likewise, healthcare spending in the United States is alarmingly inefficient. As employment rates continues to improve and more people gain access to healthcare, the United States will continue to see high healthcare spending unless additional reform is considered.

"Medicine 01" by Taki Steve licensed by CC BY 2.0


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