The spending by the United States of America on its health care sector is more than any developed nation. The stats showcase that the nation in its near future will spend around 20% of its GDP on health, which is more than the percentage spent by major Organization for Economic Cooperation and Development nations (OECD).
The cost or say spending by the nation when analyzed, reveals that they are not buying more in quantities, but the facilities equipped are quite expensive. However, what might spell trouble is that a few people of the healthcare industry know the real cost of what they are buying and selling.
From providers, manufactures and middlemen all work in an opaque market and therefore, fear that it will also lessen their revenue. On the other hand, consumers using insurances to their aid, do not have much idea about how their money is actually utilized.
Interestingly, what draws a fine line between the spending and the utilization of resources is that U.S. despite spending more, has performed worse than the OECD on most major measures of health.
A vast majority of consumer health spending now goes to paying for health insurance, which is a change in trend. Also, the contributions to employer- sponsored health coverage is not taxed, making it less expensive for companies to give its workers the health benefits.
Contributions to employer-sponsored health coverage aren’t taxed, which makes it less expensive for companies to pay workers with health benefits than wages. However, the benefits according to economists often lead to higher spending because employees feel free to get their checkups, even if not mandatorily required. The tax benefits are good, but eventually cost billions to the government revenue.
From hidden costs benefiting the pharmaceutical managers to the companies that administer drug benefits for employers and health insurers, all try and benefit using the confidential discounts. For instance Humira, an immunosuppressive, is the most demanded drug in the U.S. Its manufacturers, AbbVie Inc., has discounted the rate for insurers, however much of the rebates are actually availed by the consumers remains unclear.
Clearly, there are a lot of complications and the increasing prices may very well cast trouble for the U.S., in the coming future.