ECONOMICS OF THE HEALTH CARE INDUSTRY Introduct

According to Ginzberg and Minogiannis (2000), Americans' yearly national health care expenses (NHE) are currently about 1.2 trillion dollars and the costs are rising! This figure means that, on the average, about 14 percent of the yearly economy is spent within the enormous network of health care services and people that comprise the country's health care industry.

The purpose of this paper is to look at the economic aspects of the many programs and organizations associated with these expenditures including: Medicare and Medicaid, hospitals, Health Maintenance Organizations, and the impact of new medical technologies. This overview closes with the formulation of conclusions regarding the economic status of the health care industry.

About 50 percent of the monies being spent yearly in the health care industry are paid for by the government through its Medicare and Medicaid programs. Employer group health insurance policies account for 34 percent and out of pocket payments by consumers account for about 16 percent. Charity donations amount to between 1 sand 2 percent per annum.

Regarding government spending, Wynia, Cummins, VanGeest and Wilson (2000), report that Medicare consists of the federal government's largest health care program which provides health insurance to those 65 and older who receive social security benefits and also to the permanently disabled and to those with end-stage ren

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rograms that seek to control or manage the use by patients of physicians and other health care resources and services. The most frequently used type of managed care program, according to the author, is the Health Maintenance Organization (HMO) which Phelps defines as an organization that provides comprehensive health service to a voluntary enrolled population for a fixed, prepaid, usually capitated fee. Phelps (1997) further notes that a specific set of health care benefits is provided by the HMO using the services of a set number of providers and provider facilities regardless of the number and complexity of services provided to the enrolled. According to Ginzberg and Minogiannis (2000), managed care programs account for about 34 percent of the yearly National Health Expenditures. A longitudinal study of the economics of managed care was conducted by Wise (2000) for the National Bureau of Economic Research, an independent, nonprofit economic research organization established in 1920. Among the study's many findings, Wise observed that states with high managed care enrollment have significantly lower their growth in health care costs over the costs of states with lower managed care enrollment. It was also observed in Wise's
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Some common words found in the essay are:
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Approximate Word count = 2311
Approximate Pages = 9 (250 words per page)