Economic Impact of Public Sector Spending on Health Care

By Hy, Ronald John | Journal of Health and Human Services Administration, Fall 2011 | Go to article overview

Economic Impact of Public Sector Spending on Health Care


Hy, Ronald John, Journal of Health and Human Services Administration


INTRODUCTION

State and local governments are in the midst of significant economic and demographic shifts that will reshape their funding and development over the next decade. The impact of public sector spending on health care is one area that definitely will reshape state and local economies because it is, and will continue to be, a principal cost of governments. Public sector health spending, however, is not only a cost, but it also is a source of economic development.

In recent years, a great deal of research has focused on health care spending. For the most part, the research has focused on identifying and examining factors that have contributed to spending growth and proposing policy solutions to reduce or contain that spending growth. The predominant factors that have been studied are those that contribute to spending growth--utilization, population demographics, price inflation, and advances in medical technology. (http://aspe.hhs.gov/health/costgrowth/#employers).

This focus has been stimulated by research that has demonstrated that, over the last ten years, health care spending grew at an extremely fast rate; and economists are concerned that the state and local economies may be negatively affected by increasing health care costs. Health care expenditures in the United States are the highest among 30 high-income countries, both as a percentage of Gross Domestic Product (GDP) and in per capita terms. In 2009, the health spending share of GDP reached 16.2 percent, up from 15.9 percent in 2007. (This figure includes health care goods and services, public health activities, program administration, the net cost of private insurance, and research and other investment related to health care.) (http://www.cms.hhs.gov/NationalHealthExpendData/ 02_NationalHealthAccountsHistorical.asp) According to the Milliman Medical Cost Index--shown in Figure 1--the total medical costs in 2009 for a family of four was $16,771, compared to $15,609 in 2008--a 7.4 percent increase. The increase of $1,168 was the highest since 2006, when that increase equaled 9.6 percent.

Figure 2 shows in more detail the five major health expenditure categories for a family of four: (1) pharmacy, (2) physician, (3) outpatient services, (4) inpatient services, and (5) other minor expenditure categories.

More important, however, is the fact that government programs, such as Medicare and Medicaid, account for a significant share of health care spending. Public health expenditures made up about 46% of the health care dollar in 2007, with the remainder split between private and out-of-pocket spending (42% and 12%, respectively). (http//aspe.hhs.gov/health/costgrowth/#Introduction) In summary, not only are health costs rising, but they also are having a tremendous impact on state and local economies.

Health Care Spending in Texas

Figure 3 shows the total health care expenditures as percent of GSP for each state.

[FIGURE 3 OMITTED]

The exhibit illustrates that overall health care accounts for a slightly smaller share of economic activity in Texas than it does in the U.S--11.7 percent of Texas GSP as compared to 13.3 percent of U.S. GNP in 2005. (Kaiser Family Foundation, 2007) More specifically, however, the Texas Comptroller of Public Accounts (Rylander, 2001) estimated that:

* The percentage of health care provided by the private sector in Texas was 56%, compared to 52% in the United States

* The percentage of Health Care Provided by the Public Sector in Texas was 44%, compared to 48% in the United States

ISSUE TO BE ADDRESSED

Despite the voluminous research focusing on health care costs, there is an unmet need for better information concerning the economic impact of public sector spending on health care on local economies. There simply is a lack of data tailored toward the understanding of the holistic effects of public sector spending on health care in local communities. …

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

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
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

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

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Economic Impact of Public Sector Spending on Health Care
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?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
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.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, 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." (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

    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.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.