health care expenditure

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In national accounting of budget allocations and personal expenditure, money devoted to prevention and care of sickness comprises a substantial component of gross national expenditure. This includes personal health care costs; costs of drugs, dressings, and appliances; costs of hospital and long-term care; costs of personal services provided by physicians, dentists, physiotherapists, and others; costs of local, regional, and national public health services aimed at protecting community health and preventing diseases and injuries; and costs of administration. Collectively, the health sector absorbs about 10% of national expenditure in Organization for Economic Cooperation and Development (OECD) nations, less in low-income nations. There is a wide range, from 6% to 7% in France and the United Kingdom, through 10% in the Nordic nations, to 14% to 15% in the United States. The allocation among personal costs (out-of-pocket expenses), costs covered by insurers through individual or group health plans, and costs paid directly from public revenues varies more widely. Many health economists believe that one reason health care expenditure is higher in the United States than in other OECD nations is waste and duplication inherent in a system of fragmentary insurance systems, each with its own administrative overhead costs. The US system also leaves more than 40 million people without health insurance coverage. Another reason is the extensive use of costly technology and prescribed medication. The US federal agency overseeing national expenditure on health care is the Centers for Medicare and Medicaid Services, formerly the Health Care Financing Administration (HCFA).

Subjects: Public Health and Epidemiology.

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