ERIC Number: ED178772
Record Type: RIE
Publication Date: 1978-Dec
Reference Count: 0
A Description and Analysis of Rising Health Care Expenditures. Extension Studies 77.
Cordes, Sam M.
Two concerns that underlie preoccupation with health care costs are that society may not be getting a "reasonable return" from increased expenditures and that the quantity of services per expenditure could be provided more cheaply. Concern arises because the "market" for health care deviates significantly from other "free enterprise" markets, it being the provider rather than the consumer who makes or helps make key decisions of what, when, and where to purchase services. Recent growth in expenditures, both per capita and as percentage of GNP, has been phenomenal, the largest share going to hospital care. Increased government financing and insurance payments have resulted in a decline of out-of-pocket expenditures (from 68% in 1950 to 30% in 1977), yet medical costs comprise the single most common cause of personal bankruptcies. Since Total Expenditures = Price Per Unit x Number of Units Purchased, policies aimed at controlling one will not necessarily control the other, given such factors as increased demand due to growth in health insurance, including Medicare and Medicaid, and production costs resulting from the introduction of cost-enhancing technology. Lack of systematic policy coordination also hinders control. It is recommended, then, that policies to limit hospital expansion and to regulate rates be implemented in concert, along with review mechanisms to reduce inappropriate service utilization in combination with policies that lead to a relatively scarce supply of hospital beds. (CP)
Publication Type: Opinion Papers; Reports - Descriptive
Education Level: N/A
Sponsor: Extension Service (USDA), Washington, DC.
Authoring Institution: Pennsylvania State Univ., University Park. Cooperative Extension Service.