Healthcare Financing in the United States

The healthcare system in the United States is considered technologically advanced but expensive. The percentage of GDP spent on healthcare in the United States is significantly higher than that of any other country. Also, the amount of money spent per capita on healthcare is higher in the US than in other countries. The sheer amount and rate of growth in healthcare spending in the United States are widely regarded as unacceptable. Even with the world’s highest per capita US healthcare spending, many people do not have insurance (Dieleman et al., 2017).

The decline in the number of uninsured persons in the United States has been driven by the adoption of the Affordable Care Act. However, its major goal of slowing healthcare spending is defeated by the increased use of medical technology which contributes to an increase in prices for services and procedures in healthcare.

The reality of healthcare functioning is the constant increase in the volume of paid medical services. New medical technologies are driving up costs because they allow previously impossible procedures. Even if a new technology replaces an older and more expensive one, the result is likely to be more frequent use, leading to higher costs (Dieleman et al., 2017). Moreover, a large proportion of healthcare costs are spent on older people. As their share of the population grows, the need for healthcare will begin to exceed the capacity to meet it.

Healthcare spending in the United States is increasing, reflecting rising prices for medical services and higher spending under the US government’s Medicaid program. The US health authorities predict the growth trend will continue over the next decade. The aging of the baby boomer generation is one of the main drivers of rising costs, which is contributing to increased Medicaid coverage of the elderly and disabled, rising prices for healthcare products (Dieleman et al., 2017). The biggest growth over the next decade is expected for prescription drugs due to rising drug prices and increased use of specialty drugs.

Obama’s reform did not achieve its goal and only increased the prices of medical services. Access to healthcare is not a right of every citizen, but a service that is received by those who can pay for it. All this suggests that the United States will find it difficult to do without new reforms in the health sector in the coming years (Skinner & Chandra, 2016). A reliable and well-functioning healthcare system should be able to provide patients with the necessary medical technologies of sufficient quality that are affordable. Thus, healthcare costs in the United States must change, and the government must find ways to provide universal healthcare and reduce its cost.

New medical technology spending is on the rise in the United States despite ongoing efforts to contain government health spending. However, the increase in investment in new equipment does not automatically mean an increase in the availability of medical care, corresponding to the growth rate of costs. New technologies are embodied in more expensive equipment which contributes to an increase in prices for services and procedures in healthcare.

Taking this into account, the United States is faced with the task of achieving financial sustainability of the healthcare system using a different financing order. The US government should take several practical steps to achieve the financial sustainability of the healthcare system. The new conditions for its proper functioning will require a reform of healthcare financing.


Dieleman, J. L., Squires, E., Bui, A. L., Campbell, M., Chapin, A., Hamavid, H.,… & Sadat, N. (2017). Factors associated with increases in US health care spending, 1996-2013. Jama, 318(17), 1668-1678.

Skinner, J., & Chandra, A. (2016). The past and future of the Affordable Care Act. Jama, 316(5), 497-499.

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