Economic effects of the Health-Spending Essay

Economic effects of the Health-Spending Essay.

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The Role of Economics in the Health and Medical Care Industry

Type of paper:

economic analysis



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Pages: 4

Deadline: 18 hours

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Dewar (2010) indicates that the field of economics can provide a structure to examine “the implications of individual decision making and help define the alternative mechanisms to improve resource allocation” (p. 9), but it cannot be used as a solution to all issues concerning healthcare access and delivery.

Economists prepare economic analysis briefs to provide insight into how economic market forces operate. For this assignment, prepare an economic analysis brief that describes the role of economics in the health and medical care industry in the United States or abroad to demonstrate an understanding of Module 2. Discuss and synthesize key elements from at least two recent scholarly articles (found in the CSU-Global Library) that address one of the following points:

Determine the distribution and allocation of scarce resources.
Apply economic models, theories, or assumptions.
Offer objective methods for attempting to predict future market behavior in response to events, trends, and cycles.
Assess economic policy recommendations for healthcare stakeholders.
Evaluate the economic health of the nation or state.
Your analysis should be thoughtful and thorough, well written, and formatted accordingly:

Title page
Introduction – What is the topic, why is it important, and what are the objectives of your brief?
Body – What are the key elements of the scholarly articles that support the objectives of your brief? What economic models or concepts apply?
Conclusion – What are the future implications, policy recommendations, etc.? 
Reference page
Your paper should be 3 to 4 pages in length and conform to CSU-Global Guide to Writing and APA Requirements.

Economic effects of the Health-Spending

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Economic effects of the Health-Spending Essay

Economic effects of the Health-Spending

This document is aimed at determining the role of economics in the Health and Medical Care Industry. As indicated by Sterret, Bender and Palmer (2014), economics is a good avenue for studying the trend and impacts of the health sector on the operation of a given nation such as the United States. Therefore, the main topic is based on determining the role of economics in the Health and Medical Care Industry. The aim is to develop a brief which will tackle the topic of matter in a precise way with a major objective of relating economics to the Health and Medical Care Industry. To accomplish this, two articles as will be enlisted in the bibliography, will help explore this topic and eventually a set of recommendations and future implications associated with this brief will be offered.

The first article by Evans Melanie is a brief which intends to relate spending in the health sector with the economic growth specifically employing a case study of United States. On the other hand, the second article by MacDonnell Peter is purely aimed at critiquing the government spending on health related activities. The latter article tries to lay down an argument that the health spending is deteriorating the economic health of the U.S. and that the funds allocated to financing health related activities should be redirected to other resources which will guarantee economic growth to the country. On the other hand, the former article delivers the opposite information ‘campaigning’ for increased health spending as a major strategy of fueling economic growth. Comparing these two articles gives a novel overview of the role of economics in the heath sector with a detailed consideration of the U.S. economy which will enable the attaining of the major aim of this brief. Notably, government and public expenditure will be the major indicators of the economic impact and role of health spending activities in the U.S.

According to Evans (2015), there is a chance of accelerated growth of the U.S. economy regardless of increased health-spending by the government. In this case, the growth was projected to rise to more than 5% in 2015 following a low growth of 3.6% that was in 2013. This growth can be attributed to the fact that there were increased patients insured under the Affordable Care Act and under the Obamacare strategies. In other words, the increased number of patients increased the revenue resulting from the hospitals and health centers and consequently this raised the government revenue which improved the Gross Domestic Product (GDP) in America and result to economic growth. In a nut shell, this article aims at encouraging health spending based on the economic analysis data provided.   

However, the second article is completely against health spending. In it, McDonnell (2015) suggests that the government should cut on the funds spent by the government for health purposes and instead allocate those funds to more productive and/or promising resources. Notably he calls the alternative resources priorities. The first priority is all about video games. The author argues that approximately $25.3 Billion is spent by the Americans in a bid to enjoy videos games. The author further argues that this spending yields a very big share of the GDP for the U.S. and according to him it would be wise for the government to increase funds that will aid production of more video games which can be easily accomplished through cutting on the funds spend in health aiding activities.

The second priority is hinged on the public spending on online services; use of the internet. Interestingly, Americans spend about 23 hours in a week surfing the web (McDonnell, 2015). Consequently, this generates a substantial amount of revenue for the government. For instance, Yahoo made billions of money in 2014 securing $40 million for the CEO of the company. Critically speaking, this reflects the amount of revenue that the internet earns the government. Arguably then, it would be advisable if the government invests greatly on such productive resources rather than spending on health activities.

The other priority that the government should consider is the sugar production sector. Notably, the consumption of sugar and its products has tripled over the past five decades (McDonnell, 2015). Based on this, it would only be wise if the government spends more of its resources subsidizing sugar production practices. In so doing, the government would encourage production of sugar related products which in return would yield increased revenue for the government. Increasing funds in this case means that funds have to be rechanneled from the health sector to the agricultural sector.

 The final priority that McDonnell highlights is the sports sector in America. Notably, the sector generates billions of revenue for the government due to the sports professionals’ income tax and sports employees such as those employed in the television stations related to sports. Further, most sports fans spend a lot of cash in a bid to access sports airing channels. The government would then earn much revenue by simply investing into the sports sector. Again, according to the article, cutting on the resources allocated to the health sector would yield surplus funds that would be chipped into the sports sector and also in the media sector for improving the airing of sports channels.

   As can be gathered from the two articles, government spending as an economic factor has great impacts on economic growth of the U.S. and in hand with this is the public spending. Therefore, the economic concepts of spending for the two mentioned parties are crucial and are related directly to the health spending within the U.S. From one perspective therefore, health spending has a negative impact on the GDP and from another it has a positive impact on the GDP consequently the same effect on economic growth. On this token, there is a debate about the U.S. healthcare policy i.e. whether there should be increased health spending or not (Sterret, Bender & Palmer, 2014).

Government health-spending can be a major source of GDP and fuel for economic growth. Government spending can involve government directed universal healthcare systems (Sterret, Bender & Palmer, 2014). In this case, if the healthcare services are subsidized on international bases and not just within an organizations fold, there will be improved employees mobility, improved GDP and improved entrepreneurial opportunities. As Sterret, Bender and Palmer (2014) put it, job locks result from localized ‘self-based’ healthcare systems which are the common causes of limited employees’ mobility and also limited entrepreneurial exploitation. The only remedy to this is establishment universal healthcare systems which consequently require increased health spending by the government.

To sum it all up, a reasonable increase in government health spending would cause a direct increase in economic growth. Rather than reallocate funds from health spending, the government should increase the fund allocation on the same which would aid provision of better healthcare services and at the same time fuel growth of the economy. The U.S. government should therefore implement universal healthcare systems such that whether the employee is employed in one organization or another the health cover policy he/she benefits from is still legitimate.      


Evans, Melanie. (2015). Economic report expected to show health spending jump. 0160-7480

McDonnell, P. (2014). What’s the cost of a human life?. OphthalmologyTimes. Retrieved 25 August 2016, from,1


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