How Does Health Care Economics Affect The Economy

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Economic Terms and Health Care History Health care economics has altered very much during the progression of history. Much of this progression has to do with the evolutionary changes of the United States. The key factors that induced change in healthcare economics are medical care and technology. There is a great importance to understand health care economic history and the cash flow system; managers are capable to use this knowledge to assist the company to prepare for its time ahead. The determination behind health care economics is money; money that assists in running the health care organization and money is also the key to the organization’s success. Over the past sixty years, who is responsible for payment, has changed in a major…show more content…
The demand for healthcare is unswervingly discovered to be inelastic. The span of price elasticity is relatively wide, meaning that a one percent increase in the price of healthcare will lead to 0.17 percent reduction in healthcare expenditures (Ringel, 2012). According to Ringel (2012), the demand for health is also found to be income inelastic. On a positive note elasticity measures that the income increases as well as the demand for health care services also increases. Although the demand is small, it is still an increase. Gross Domestic Product In recent years, attention has been focused on health care spending increases. Economists have alerted the growing health care expenditures could drop economic growth as well as employment. Health care spending has a substantial influence on the federal budget. In 2003, total national spending increased to $1.7 trillion. By 2013, national expenditures is projected to be $3.4 trillion. According to Effects of Health Care Spending on the U.S. Economy (2005), as a share of GDP, health spending is projected to reach 18.4 percent by 2013, up from 2003 level of 15.3 percent. 1960 1985 2003 Total $27 billion $427 billion $1,678.9

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