Healthcare Costs and Increasing GDP Spending: What Can Be Done?

Abstract

Abstract

Healthcare Costs and Increasing GDP Spending: What Can Be Done?

The cost of healthcare and healthcare spending continue to rise in the United States, pushing the proportion of gross domestic product (GDP) spent on healthcare (both consumer healthcare spending and government healthcare spending) to exponential heights (CMS, 2022b). Spending is rising mainly because there is no attempt by government to stabilize prices. The economy on its own does not regulate healthcare pricing. Spending on healthcare is not like buying bananas. Healthcare pricing does not react in the same way to supply and demand as other consumer goods. The medical, pharmaceutical, and medical technology industries press the government to keep the healthcare pricing system the way it is, unregulated. This article will explain why government does not need to regulate healthcare prices, nor create a single-payor system, to get a handle on healthcare spending. Government can regulate certain aspects of healthcare as explained in this article, avoiding dictating healthcare prices, and in doing so, shift spending from healthcare to other consumer goods and services.