Accounting Assignment Example | Topics and Well Written Essays - 250 words - 13

Accounting - Assignment Example The healthcare sector represents a major part of America’s economy. Current expenditure on healthcare exceeds 15% of the GDP and Economists project it to hit $4.2 trillion or 20% of the GDP by 2016. Yet according to Commonwealth Fund’s analysis of World Health Organization data, America ranks last among developed nations in preventable mortality with over 47 million Americans lacking health insurance. Additionally, healthcare continues to be one of the fastest growing components of the economy, growing at a faster rate than the GDP. Health related expenditure is a large and growing segment of government budgets. Last year, healthcare expenditure accounted for one quarter of federal spending. From the public interest point of view, the economic stakes in healthcare reform is high. However, it is wise to note that for all the problems, the United States healthcare system has much strength and policy makers should not lose the good while addressing the bad. The major financial challenge of healthcare reforms is controlling the costs. The problem here is not the high level of spending on healthcare but rather the rapid growth of spending on healthcare. The per capita spending in America continues to increase at a faster rate than per capita income. Economic projections indicate that persistence of this trend would lead to a relentless rise in income devoted to healthcare expenditure. A large portion of state and federal spending goes towards subsidization of health insurance. In 1975, federal expenditure on Medicaid and Medicare accounted for 6% of total non-interest federal spending. Today, this figure stands at 23%. Due to the increases in cost of healthcare, the CBO projects that, without reform, Medicaid and Medicare will account for about 35% of non-interest federal spending in 10 years’ time. This trend points toward