Abstract

The USA is one of the countries with the highest expenditure on the health sector in the world. It defines its economyand leads to the growth in the GDP of the country. The leading cause of this increment on the expenditure can be traced back to the increased levelof government policies that require every household, employers and local and state government to participate in the promotion of the health sector. While the house subscribe for the health insurance policies individually or through their employers, the government use that finance to provide healthcare services to the citizen.  This has an impact on the economy of the country since it affects every part of the country’s economy. This discussion evaluates such implications and how it can be used to bring a positive change in the state.It is based on an economic analysis of the participant of the economic growth of a country.

Keywords: Household, GDP, Health sector, expenditure, cost

Health Care Economy in the USA

The USA is one of the countries with economically involving health sectors in the world. It is estimated that the spending of the citizen on their health is becoming the leading than any other expenditure in other areas of the economy. With the introduction of the ACA n during president Obamas administration,  a heavy healthcare burden was transferred to the citizen that give them the responsibility to fund the healthcare activities of the country through a process of subscription to the care act. An evaluation of the consequences of that policy reveals a significant impact of the country’s GDP. This discussion, therefore, focuses on the economic impact of the healthcare sector of the USA.

Effect of Healthcare spending on the economy of USA

Healthcare spending in the USA has impacted on various groups of individuals in the country. Aggregate output of the economy is one of the areas that are having been affected by increased healthcare spending. On the negative side, companies have complained about spending too much on covering the cost of health for their employees. These factors have a direct effect on their profitability and prevent them from achievingtheir set performance in the country. It makes most companies opt for moving from the state to othercountries like Canada were the cost of operation and production is slightly low.

On the other hand, the increased health expenditure may have a positive influence in the economy since it may stir up job expansion in other sectors.in this case, there would be a rapid growth of the health sector and related sector which will accommodate more employees. Theincreased expenditure on health also increases the spending in the industry improves the health of the population and ensures that the community is more productive than when they have poor health.Increased expenditure   in health is a sign of growing income of the country and a reflection of thegrowthof the economy.

The household has experienced tremendous effect due to the increased expenditure on health care. The rising premium of insurance to the house is likely to prevent the wage increment and reduce the insurance benefit since it requires American employees to pay a large share of their incomefor the health insurance coverage. I t is always clear that an increase in the health insurance increase the expenditure of the companies on health by two third. It also reduces the wage of the employees. Theremaining one-third of the Permian is a burden off. Therefore, it reduces the benefit of the household wage.

Companies react differently to the rising cost of health insurance. In a case where they are unable to offset the increase in the healthcare premium, they adjust the wages, hours of work, or benefits to accommodate the increased cost. This affects the household directly. In some cases, such increment in the value leads to decrease or remove the full-time employment from their schedule and replace them to part-time jobs or temporary workers who are not eligible

The impact of healthcare spending is also evident in the localeconomy.The health sector has been a source of employment tinsthe local governments with over 10 million workers surviving from the industry. The federal and state government is another has also been impacted by the increase in the expenditure of the health sector.The rise in the healthcare cost has increased the spending for both federal and state governments.This has an impact on tax increment and increased borrowing on meeting the demanding expenditures of the health sector.

Employersalso have a burden to bear in the increased expenditure of the health sector of the country.  The weight of the private sector comes from the fact that most individuals are employed in the private sector and their employers have to take the burden of paying for their health coverage. This, therefore, erodes the profitability of the employer companies in their private industry.

Critical analysis of this impact

Many economic indicators are crucial in the analysis s of the effects of the increasedexpenditure in the health sector. One of them is the tremendous increase in the GDP of the country.  This is evident from the fact that it becomes the most productive sector of the economy which employs many people and provides service to the state at a remarkably higher rate. The number of healthcare service providers. A focus on the per capita expenditure an on health with a comparison to per capita income of the household in the USA indicatesthat healthcovers a higher percentage of their income. This is an indication of the higher expenditure on health care.A further comparison of per capita expenditure on health of the USA states and those of other states in the world indicate that that of the USA is much higher than those of other countries in the world. This is a further indication of the increased expenditure in the healthcare of the country. Other economic indicators include the reduction of employment in other sectors as the health sector flood with more employment opportunities and the decline of the utility of the household.

Recommendation of strategies

The increased expenditure of the expenditure on health for the USA is one that needs to be reviewed critically to ensure that t the cost reflect the actual benefit the citizen of the country gets from the expense. In this case, the utility should be indicated on the economic productivity in other sectors through the avoidance of poor health on the employees and providing a long-lasting effect on the lifespan of the American population. One recommendation for achieving this involves ensuring that health insurance cover allows for both the low-income individuals and the high-income individuals to get the same benefit from the service provision from the health sector. There should also be a system that enables the citizens to bear the same burden of the cost of health based on the premium involved. This requires setting a specific percentage of the household’sincome for the insurance cover and not depleting them from gettingother services.

Conclusion

The increased expenditure in the health sector is an indication of the growing income of the country and an increase in the GDP of the country, and thiscan be seen in the way households, companies, and other stakeholders are willing to put their funds on the health sector of the country. However, the negative impact of the increasedexpenditure may be a drawback and becomes a challenge to other areas of the economy. It may appear as a way of transferring employment from different sectors to the health sector.

 
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