In the study of macroeconomics, the goal of any analysis is to see if the respective economy’s
governing body is successfully creating and allocating its revenue. For this paper, the intention is to
examine healthcare costs, and the reality of a turn to universal healthcare. One governing body, the
United States, is currently shouldering the burden of 46% of healthcare costs in its respective economy,
due largely to Medicaid and Medicare. With the adoption of the Patient Protection and A’ordable Care
Act (ACA) in 2012, and act that sets in motion a system of universal healthcare, public healthcare
expenditures are expected to increase to just 8% of GDP in 2038 (Congressional Budget O4ce, 2013). As
the U.S. develops its solution to decades of wasteful healthcare spending, one loophole closed at a time,
the ACA allows the country to pat itself on the back. Much like taking away the checkbook of a spouse
who just can’t seem to say no at the checkout line or providing a loan to a brother, the government is
a7empting, with the ACA, to take on the burden and try seeing if it can reel in our stent-and-pap-smear
spending spree.
It’s a common misconception that the high costs of healthcare are a large financial burden to the
individual, while in reality public spending accounts for the majority of total healthcare costs. As of
2012, individuals were responsible for 28% of the overall cost of healthcare, Government provided 46%
of the bill (Centers for Medicare & Medicaid Services, 2014). That is not to say this is without
consequence to the individual. The government is covering the bill with taxpayer money. It is much like
a child o’ering to pay for his mother’s breakfast with the money received from sweeping the =oor. But
the spending doesn’t stop at breakfast, it gets as out of hand as twenty (20) proton beam accelerator
facilities, costing hundreds of millions of dollars in order to treat only one type of cancer, despite no clear
advantage over cheaper alternatives (New York Times, 2014). Regardless of how you break down costs,
it’s clear that the United States is not properly allocating its revenue.
There is another important way to look at healthcare costs aside from a percentage of GDP. Per
capita income provides a perspective from the point of the taxpayer, the spouse, brother or mother in
our metaphors. Real per capita spending on healthcare has doubled approximately every 17 years.
Furthermore, government-sponsored healthcare coverage is expected to grow from 99 million
individuals covered in 2011 to 135 million by 2017 (The Heritage Foundation, 2013) under the ACA. A
combination of soaring costs and growing coverage expedites the need for cost-reduction. That being
said, the notion that the private sector would be7er be able to reduce these costs, due to desires for
profit, is open to discussion. Pro9ts are not always brought by reduction of costs. They are brought
through manufactured demand, manufactured supply level, and many other tricks that the lack of
regulation have allowed – in the healthcare industry and beyond. There needs to be a solution that, at
its heart, looks at reducing healthcare costs.
In order to be able to reduce healthcare costs, the US needs to decide how it views healthcare
