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National Health Care Expenditures

It is understood that policymakers describe public health as an immeasurably significant national priority. From the threat of epidemics and infectious diseases to the problems of an aging population, obesity, and chronic illnesses – all challenges related to the health and well-being of Americans traditionally fall on public health professionals and the system in general. In the present day, constantly increasing national health care expenditures (NHE) are regarded as a highly disturbing issue consistently present in the national economic and political spotlight of the United States. According to the NHE data for selected calendar years presented by Centers for Medicare & Medicaid Services (n.d.), between 1970 and 2003, total NHE increased almost six times. All expenditures for hospital care, physician and clinical services, nursing home care, home health care, prescription drugs, program administration, and public health activities have changed in the same ratio.

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As a matter of fact, the quality of health care has substantially improved since the 1970s. Technological progress, the change of health care policies in favor of the patients’ well-being, the improvement of medical facilities, and the development of new methods of treatment contributed to the increase of NHE. In other words, the government started to spend more on treatment and health care delivery per person. In 2003, NHE accounted for more than 15% of GDP, and this percentage continued to grow up to 17% in 2018 (Centers for Medicare & Medicaid Services [CMS], n.d.). However, while between 1970 and 2003, the exponential growth of expenditures may be observed, in recent years, its rates have notably decreased (Centers for Medicare & Medicaid Services [CMS], n.d.). In general, total health spending in public health is shared between the federal government, the households, the private business, local governments, and other private investors.

In fact, the enormous growth of expenditures in the public health system considerably threatens health care sustainability for a substantial number of American citizens. Employers are not able to afford increasing health care insurance premiums for employees (Riggs, et al., 2011). In addition, health care insurance companies “continuously seek to control their risk by excluding high-risk patients and restricting covered benefits” (Riggs, et al., 2011, p. 105). As the government “cannot afford to provide unlimited benefits for its citizens by shifting the costs to future taxpayers,” people become partially or fully responsible for all health care expenditures if illness or injury occurs (Riggs, et al., 2011, p. 105). Moreover, the implementation of programs that allow citizens to receive medical aid without insurance contributed to the rise of health care costs.

At the same time, NHE per capita does not reflect the change of prices for individuals. The country’s economic situation, the population’s total growth in incomes, inflation, and living standards should be considered for the evaluation of the patients’ financial burden. The costs of health care are traditionally affected by an aging and growing population, the prevalence of particular diseases, service intensity, and medical service utilization.

In general, according to the data, all service categories are developing, and that is why NHE is subsequently increasing. Several factors contribute to the growth of NHE:

  • Aging population;
  • Population growth;
  • Increase in chronic diseases;
  • Increase of ambulatory costs;
  • Implementation of programs such as Medicaid and Medicare;
  • Increasing health insurance premiums.


Centers for Medicare & Medicaid Services [CMS]. (n.d.). NHE Fact Sheet. Web.

Riggs, J. E., Hobbs, J. C., Hobbs, G. R., & Riggs, T. H. (2011). U.S. national healthcare expenditures: Demonstration and explanation of cubic growth dynamics. Theoretical Economics Letters, 1, 105-110. Web.

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