Given the widespread debate around health care (and its financing) reform, it’s important to understand the current status of health care finance and how it fits into the larger economy. How has the largest economic crisis in 80 years impact the situation? In 2009, per this New York Times article, health care accounted for a larger share of a smaller economy — a record 17.6 percent of the total economic output in 2009, according to a Federal government report issued earlier this month.
The nation spent $2.5 trillion on health care in 2009, for an average of $8,086 a person, and the recession had a profound influence. The share of the economy devoted to health care rose one percentage point in 2009, the largest one-year increase in a half-century of record-keeping.
The economy contracted while health spending continued to grow. Yet Many consumers decreased their use of health care goods and services.
What are the implications for health care reform? That question is widely debated. Senator Orrin Hatch (R, Utah) in line to be the senior Republican on the Finance Committee, said the new health care law could lead to “crushing increases in health costs and premiums.” By contrast, the chief medicare actuary, Richard S. Foster, has estimated that the new law will lead to an increase of only nine-tenths of 1 percent in national health spending over 10 years. Read more…
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