Health Insurrance Medical Financing


Although nearly 18 cents of every dollar spent in the United States goes to
health care, health care contributes only marginally to health. As illustrated
in Figure 1.1, there is a substantial misalignment between where the United
States spends its health care dollar and what impacts health. Although medical
care receives nearly 90% of national health expenditures, this care contributes
only roughly 10% to health status. Conversely, healthy behaviors
contribute roughly 50% but received a mere 4% of national health expenditures
(Network for Excellence in Health Innovation, 2012). The best overall
predictors of health status are factors such as socioeconomic class and
educational attainment. So, in the aggregate, the most healthy among us are
educated Americans in good jobs who live in safe neighborhoods. This creates
a paradoxical tension; when more public and private money is put into
health care, there are fewer resources available for job creation and education,
which in turn, means a whole population may have fewer opportunities
for the education, employment, and a lifestyle that is associated with better
health. Thus, how money is distributed ultimately impacts the health of a
population through social determinants of health (see Box 1.1 for the World
Health Organization defi nition of social determinants of health). Health economics
concerns itself with these issues because it considers and analyzes the
manner in which scarce resources are allocated, for example, in light of alternative
ways to allocate resources that impact determinants. It also considers
how resource allocation impacts human behavior.

About the author

Dr. Arthur

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