Impact of Economic Growth on Public Healthcare Expenditure Essay

Impact of Economic Growth on Public Healthcare Expenditure Essay

Impact of Economic Growth on Public Healthcare Expenditure Essay

For every nation to expand socio-economically, there is need to consider the welfare and health status of her population (Wang et al, 2011). Health economics has been applied widely in many fields of public health due to its ability to provide techniques and concepts that are helpful to policy makers to arrange for better planning, allocation and management of health resources to achieve equitable healthcare (Abel-Smith, 2018). From disciplines of health economics, evidence can be generated that useful amount of gross domestic product (GDP) of a country can be determined and allocated to health sector. Studies have been conducted on the relationship between public healthcare expenditure and GDP of a country.

Healthcare expenditure is witnessed to be continuously rising in all countries and is becoming an area of significance as far as financial sustainability of national health systems is concerned (Kutzin, O’Dougherty, and WHO, 2017. The issue of rising healthcare cost cuts across all countries including high-income countries. All countries are working to devise factors that could help manage public healthcare expenditure. Ever since the largest recession that invaded the world in 2008, the indicators that influence economic growth have been developed. Economic growth is one of these factors. Therefore, this study finds it important to gain an understanding of economic growth so that adaptable policies can be determined especially on allocating money to healthcare sector. Economic growth is mostly affected by financial crisis and this could lower the allocations to public healthcare facilities. The purpose of this study is to enrich the existing literature by contributing on how economic growth affects healthcare expenditure. The study is conducted with respect to United Kingdom. Impact of Economic Growth on Public Healthcare Expenditure Essay
1.2History of Healthcare Financing in UK
Public healthcare in United Kingdom is provided to all the permanent residents. The coverage of healthcare is freely provided and paid for by general taxation. It is approximated that 18 percent of income tax from the citizens are used to finance healthcare. According to Stribling (2020), 8.5 percent of UK’s GDP is spent in providing healthcare. In addition, UK has private healthcare sector that is rapidly growing but it is much smaller than the public sector. The public healthcare in UK is provided by National Health Service (NHS) which was formed in 1946. Before NHS was found, the healthcare was only available to wealthy individuals unless one obtain free treatment through charitable hospitals. Several developments took place until NHS was formed.
Having a comprehensive health expenditure estimates in a country is a very important input in development of health policies and planning (Webber and Brown, 2018). From 1980s, total healthcare spending taken as a percentage of GDP in UK has been on a general rise. According to Towers Watson report, the private sector for health insurance took a very important role and accounted for 16.7 percent of total healthcare expenditure in 1999, an increase from 10.6 percent in 1980. The medical trend in 2006 was 6.0 percent, followed by 2009 (9.3%), 2010 (8.8%) and 2011(9.5%). In 2015, 2016, 2017 and 2018, the total healthcare expenditure of UK as a percentage of GDP was 9.9%, 9.9%, 9.8% and 10% respectively (Aikman, 2018). Impact of Economic Growth on Public Healthcare Expenditure Essay
The healthcare system in UK is one of the most efficient in the world when seven industrialized countries were analyzed (Osborn and Squires, 2012). The areas of performance that Commonwealth Fund Report identified include quality, access to care, efficiency, health lives and equity. According to the ranking accorded to each country, Netherlands was the first followed by UK and then Australia. When it came to access to care and quality of care, UK performed well. Efficiency was measured by examining the total healthcare expenditure as a share of GDP and UK emerged the first. According to the report, UK had short waiting times for basic medical care but long hours for specialist care. Impact of Economic Growth on Public Healthcare Expenditure Essay
In terms of expenditure, UK government spent in the financial year 2018/2019 around £153 billion on health related matters (World Bank, 2018). This represent an increase of 2 percent from the previous year. The total expenditure on healthcare in 2017 in UK was totaled at £149.94 billion which was an increment of 3.3 percent from the previous year 2016. On the other hand, this amount accounted for 9.6 percent of gross domestic product; a reduction from 9.7 percent in 2016. However, in real terms, (figures have been adjusted for inflation), in 2017, the healthcare spending in UK rose by 1.1