Overview/History

Over the past several decades, the cost of health care in the U.S. has dramatically increased. Financing health care is done by three major contributors; the government, private insurance companies and the consumers. Since the costs of health care in the U.S. has increased so dramatically, consumers are struggling to pay without financial help. That being said, it is no wonder that both the government and private insurance companies have stepped in to pay a large chunk of health care costs for the consumer.

Financing health care in the U.S. is an extremely complicated topic because of the many different financers we use. There are 3 major characteristics that describe how the U.S. finances health care. The first topic of interest is private insurance. Much of U.S. health care financing comes from private insurance companies. They will cover a certain percentage of the total health care bill. Most people receive private insurance from their employers. It can be purchased individually, although it may be more expensive. The next example of financing in the U.S. is government based. Government programs are directed towards people who are older, disabled, low-income, or those that have government based jobs such as those in the military. The government is a major financial contributor for health care in the U.S. with programs such as Medicaid, Medicare, Workers Compensation, and other similar programs. Lastly, the next type of financing for health care in the U.S. is those who pay for health care costs on their own. Those that choose this type of plan are generally in financial trouble and cannot afford private insurance. They usually do not qualify for government programs. For those who are financially well off and choose to not invest in private insurance most likely choose this because they are healthy and feel they will save money this way.

The United States spends almost two trillion dollars a year in health care costs, or about 16% of the total GDP. This ends up being about seven thousand dollars per person a year spent on health care costs. Although that is a rough estimate of what each American spends, it is safe to assume that some are spending much less than that, while others are spending much more. For those Americans spending more, a cost like this could be debilitating to a low-income family. It is very important to have public or private sectors financing health care. A great example is when a family member needs to go to the hospital for a kidney stone removal procedure via supersonic waves (no surgery). The total cost charged by the hospital would be twenty-five thousand dollars for a four hour hospital visit.

Without financial help from the government or a private insurance company, it is safe to say that no family would be able to afford such steep costs. Both private and public insurance programs greatly increase the amount of people who have access to health care in this country. With roughly forty-five million+ Americans without insurance coverage, the U.S. still has a lot of work to do.

It is also important to state that without appropriate financing, hospitals would end up in serious financial trouble. It would be debilitating to the health care system as well. This has a direct effect on the quality of health care consumers would receive. Without proper funding, hospitals would be unable to support a full staff or provide up-to-date technology needed for diagnostic and treatment purposes.

The topic of financing health care is the most important topic in healthcare because without financing, health care would be almost non-existent. It is important to realize that financing health care has lead to major advances in the medical community and should be the first thing to consider when reforming health care in the United States. It also may be the hardest part to change. One may argue that other aspects of health care, such as technology, is the most important topic but without financing health care, hospitals would not have the money they need to bring in new patients, have up-to-date technology and the amount of staff they have now. Everyone needs to focus on the financing aspect of health care in order for reform to move forward.

Kayla Engel

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