Business, Households, and Governments: Health Care Costs, 1990

By Levit, Katharine R.; Cowan, Cathy A. | Health Care Financing Review, Winter 1991 | Go to article overview

Business, Households, and Governments: Health Care Costs, 1990


Levit, Katharine R., Cowan, Cathy A., Health Care Financing Review


Introduction

National health expenditures consumed 12.2 percent of the gross national product (GNP) in 1990 (Levit et al., 1991) and are expected to rise to 16.4 percent of GNP in the year 2000 (Sonsefeld et al., 1991). These increases raise concern over the availability of resources to pay for upwardly spiraling health care costs--resources that differ by sponsor. By measuring the burden health care costs impose on each sponsor, we can track mounting pressure within the separate sponsor sectors that will trigger change. These pressures have been building for both businees and government for several decades; however, for the household sector, increasing health care cost burdens are only beginning to be felt.

The analysis presented in this article builds on the national health accounts (NHA), which present spending by health care bill payers such as Medicaid, Medicare, and private health insurance. The NHA estimates are rearranged and disaggregated to permit an examination of sponsors of health care who provide funding to bill payers. These major sponsors of health care are business, households, government, and non-patient revenues. Their spending is measured as expenditures for health services and supplies (HSS) that represent the cost of health care excluding research and construction. Some payments for HSS by sponsors pass through health care bill payers such as insurance and government, while other payments (e.g., out-of-pocket, non-patient revenues) flow directly into the health care system (Figure 1). In this article, one additional level of payer is revealed beyond those presented in NHA. Ultimately, however, the individual bears the primary responsibilty of paying for health care through health insurance premiums, out-of-pocket costs, philanthropic contributions to health organizations, income taxes, earnings reduced by increases in employers' health insurance costs, and higher cost of products.

HSS amounted to $643.4 billion in 1990, an increase of 10.5 percent since 1989, the third consecutive year that HSS has grown at double-digit rates. Over time, the primary responsibility for sponsoring health care costs shifted from the household to other sources, such as business and goverment. In 1965, households paid for 61 percent of all HSS, with business accounting for 17 percent and public programs accounting for 21 percent. By 1990, the distribution of payments changed, so that each of the major components accounted for approximately one-third of the health care cost (Figure 2). Because of these changes, business is becoming extremely concerned over the costs of health care and the amount of resources being consumed. This was especially true in 1990, as the United States entered a recession. The recession caused growth in consumer spending for most goods and services to slow down, while spending for health care continued to grow unabated.

Business paid $186.2 billion for health care in 1990 (Table 1), 29 percent of HSS. Business estimates include expenditures for all types of organizations--sole proprietorships, partnerships, and corporations. These payments cover employer contributions to health insurance premiums for employees, mandatory employer contributions to the Medicate hospital insurance trust fund, workers' compensation medical premiums, temporary disability medical insurance, and industrial inplant services.

The employer contribution to employee health insurance premiums accounts for the largest portion of private business health spending: $139.1 billion, or 75 percent. The second-largest component is the employer contribution to the Medicare hospital insurance trust fund, which, at $29.7 billion, holds a 16-percent share. Workers' compensation, temporary disability insurance, and industrial inplant health services comprise the remaining $17.4 billion, or 9 percent of private business health spending. Since the advent of Medicare and Medicaid in 1966, these component shares of private business health care expenditures have remained stable. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Business, Households, and Governments: Health Care Costs, 1990
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.