U.S. health care spending
U.S. health care spending grew 3.6 percent in 2013, reaching $2.9 trillion or $9,255 per person. As a share of the nation’s Gross Domestic Product, health spending accounted for 17.4 percent.
Using the above information and other information you will be directed to below, do the following:
Define the economic principle of opportunity cost.
Locate current GDP expenditures and express the percentages in a graph or a chart.
Explain whether spending 17.4% of GDP is too much or too little to spend on healthcare.
Defend your position using the concept of opportunity cost and highlight specific GDP expenditures that are impacted by healthcare expenditure (opportunity cost).
Resource:
Hartman, M., Martin A. B., Benson, J., Catlin, A., & The National Health Expenditure Accounts Team (2011). National health spending in 2011. Health Affairs, 32(1), 87-99. DOI: 10.1377/hlthaff.2012.1206. Retrieved from https://www.ncbi.nlm.nih.gov/pubmed/23297275.
Sample Answer
Opportunity Cost and Healthcare Spending in the US
1. Defining Opportunity Cost:
Opportunity cost refers to the potential benefit that is given up when choosing one option over another. It represents the cost of missed opportunities. In the context of healthcare spending, the opportunity cost of allocating 17.4% of GDP to healthcare is the potential benefit that could have been obtained by allocating those resources to other sectors of the economy.
2. Current GDP Expenditures and Graph:
Unfortunately, the provided information only mentions healthcare spending as a percentage of GDP. To analyze opportunity cost, we need data on other GDP expenditures. Using resources like the Office of Management and Budget’s Historical Tables, we can obtain the current GDP expenditures on various sectors: