Expenses: Paying for the United States Healthcare System

::written circa. Fall 2013.

According to Barton (2010), in 2007, the United States accounted 25.4%, of the total healthcare costs, towards physician and clinical services.  This calculated to be a 2.9% increase, compared to the numbers in 1960 (Barton, 2010). Additional figures illustrated that the funding sources for these services totaled $478.8 billion (Barton, 2010).  Approximately 34% of the funding sourced from both the federal and state government branches.  And for comparing purposes, private insurance led the sourcing at 49.4%.

Barton (2010) further justified 37%, of the total healthcare cost, towards hospital care. And though this recorded to be a 2.4% decrease, compared to 1960, hospital care still remains to be the largest expenditure.  Accounting for $695.5 billion, 55.3% of funds sourced from both the federal and state government branches.  This is compared to the 37% that is sourced from the private insurance market.  With all this said, curiosity brings about the most universal question in the world: “Why does healthcare cost so much, in the United States of America?”

With financial incentives from both the private insurance and pharmaceutical market, the flawed capitalistic healthcare system has been well known to possibly contribute to these increasing expenditure trends.  According to Antos, Lambrew, & Seshamani (2008), the “continuance of our current structure” will certainly have a negative impact on healthcare, in futures to come.  In the fee-for service system, private financial incentives can certainly open the workforce to significant negligent care through increasing expenditures on unnecessary medical procedures.  Of course, this depends highly on the ethical morale of the physician.On the other hand, where one sees negligence, the other might see capitalistic opportunity to pay tuition loans, medical malpractice insurance premiums and legal costs.  However, according to Anderson, Frogner, Hussey & Water (2005), malpractice insurance premiums were labeled to cause only a “small impact” on total healthcare spending.  Though, this research does not account for the burdens of legal costs. And inevitably, the legal system can be another separate capitalistic force in itself.

Attempting to strategically tackle the carelessness of financial incentives places opportunistic implications on healthcare administrators. One of the big opportunities administrators face is the lack of financial transparency for healthcare services.  According to Tate (2012), spending less on something, by using it less, isn’t the same thing as lowering it’s cost. If we gear our healthcare towards decreasing the use of expensive advanced technologies, then we are merely just decreasing the quality of care. The market will just do without it.  Perhaps it is rather more beneficial, for the future of the U.S. healthcare market, to bring to light the costs of services prior to treatment.  Ideally, according to Brill (2013), a “charge master” that is open for the public.  In turn, bringing more buying power to the individualistic population.

Lastly, there isn’t a question that a stricter system of ethical implications needs to be in place. However, instead of removing the fee-for-service system in its entirety, perhaps gears should be adjusted so that financial incentives would be reinforced through more promising outcomes. According to Chaix-Couturier, Durand-Zaleski, Durieux, & Jolly (2000), perhaps incentives can be readjusted to (1) reducing unnecessary procedures (2) transforming clinical practice and (3) improving the quality of care to reach a targeted goal. All in turn will increase generalized productivity of the workforce and removing incentives for negligent care.




Barton, P.L. (2010). Understanding the u.s. health services system (4th Ed.) Chicago, IL. Health Administrative Press

Anderson, G., Frogner, B., Hussey, P., Water, H. (2005). Health spending in the US and the rest of the industrialized world. Health Affairs. 24 (4): 903-914.

Antos, J., Lambrew, J., Seshamani, Meena. (2008). Financing the US health system: issues and options for change. Bipartisan Policy Center. Robert Wood Johnson Foundation.

Tate, N. (2012). Obamacare survival guide. Humanix Books. Westpalm Beach, FL.

Chaix-Couturier, C., Durand-Zaleski, I., Durieux, P., Jolly, D. (2000). Effects of financial incentives on medical practice: results from a systematic review of the literature and methodological issues. International Journal for Quality in Healthcare. 12 (2): 133-142.

Author: nursesarereal

My nursing professor once said that keeping a journal, over time, will allow me to see growth. In myself? I’m not sure yet. I’m hoping. I like to believe that nursing school saved my life. Maybe I’ll have some fun doing this. Cheers.

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