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What Are Health Expenditures?

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  • Written By: A. Leverkuhn
  • Edited By: Andrew Jones
  • Last Modified Date: 12 September 2014
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When finance professionals or others discuss health expenditures, they are most usually talking about payments made by government entities to secure health care outcomes. Every country in the world has its own health care systems and government health care expenditures, and in general, health expenditures are just measurements of what it costs to provide or support health care systems. A discussion about health expenditures might center around a national health care system, health insurance system, or policy on payments for individuals covered by government-sponsored health care entitlements.

Analysts who are considering the financial situation of a particular national economy might talk about health expenditures as a percentage of GDP, or gross domestic product. In other situations, experts might be talking about health expenditures as impacting domestic policy where health care systems are involved. There is often a political component to health care expenditures made by a government.

One major issue around health care expenditures by world governments is the idea that most modernized nations have a national health care system that covers all citizens. The notable lack of such a system is evident, for example, in the traditional health policies of the United States, where health care expenditures are often tied to extremely political concepts. Health expenditures can be significantly political in all modern nations, however, as changes to health care policies can bring about protests or other political outcomes.

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In countries that do have existing national health systems, citizens frequently analyze those programs and make statements about how they affect overall health care expenditures for the national government. These kinds of statistics might form the basis for a variety of op-ed pieces in major national newspapers, or provide fodder for various special interest groups in a national political landscape. One reason that health expenditures are so controversial is that they are tied so closely to the health and financial success of the average citizen or family. In many cases, the health expenditures made by governments directly affect how much care an individual or family can receive within a certain budgeted amount, for example, a total personal savings.

Those who are talking about health care expenditures are often talking big numbers. National health care systems generate costs in the amounts of millions and billions of currency units. Assessing a nation’s annual health care expenditures can be a way to focus on how that country’s health care policy is affecting its overall economy, and it is not unusual for governments to attempt to cut back on these expenditures in periods of economic difficulty.

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