The Organization for Economic Co-operation and Development (OECD) is a conglomeration of thirty-six countries whose goal is to foster economic progress and growth in the world. The countries are committed to reinforcing democratic governance and finding solutions to world problems through negotiation, consultation, and collaboration (Gearhart, 2016). The countries that constitute OECD have high-income economies implying that the level of Human Development Index is very high. Generally, such countries are categorized as developed nations. Statistics show that world economies are controlled by the input of the OECD (Gearhart, 2016). The countries have been instrumental in shaping the economic landscape of the world. The OECD as an organization is influential is affecting the policies that are formulated and implemented by reputable organizations such as the UN (Gearhart, 2016). As much as the nation’s forming OECD are categorized as developed, it is important to note that the level of development varies. For instance, both the US and Mexico are members of OECD, but the US is more developed than Mexico.
Since the establishment of the organization, the US has been ranked as the highest spending in all aspects of national governance and wellbeing. Research shows that the US has high total factor productivity compared to other nations in the OECD (Ng & Ng, 2016). The resultant effect is that the US has continued to maintain its position as number one economy. The US is endowed with sufficient resources for production. This implies that the GDP of the nation has been steadily increasing. The per capita of the GDP of the US has been steady over the past years elevating the nation to the economic pedestal (Ng & Ng, 2016). The highest level of spending in the US can also be attributed to the number of population. The US is highly populous compared to other nations in OECD (Beilfuss & Thornton, 2016). As such, the US administration at both levels, that is the federal and the state governments have increased healthcare budgets.
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As seen with the increasing population, the US has reformed healthcare policy. Subsequently, the previous administrations have introduced new fiscal measures (Beilfuss & Thornton, 2016). For instance, healthcare spending primary focused on the Medicare and Medicaid. The administration of President Obama introduced the Affordable Care Act (ACA), commonly known in the political playfield as the Obamacare policy. The policy revolutionized healthcare spending in the US since its implementation (White, 2014). Indeed, the policy has faced stiff opposition from the Republican legislators who deem it as an economic burden. The percentage of healthcare spending in comparison to the aggregate GDP in the US has significantly increased. Notably, there has been a change in the healthcare spending data over the past twenty years.
The healthcare spending for the majority of the OECD countries was increasing rapidly from 1998 to 2007. For instance, studies show that annual healthcare expenditure in the US is approximately three trillion US dollars (White, 2014). The amount accounts for 17 percent of total GDP. The upward trend has been maintained for many years, and it was attributed to the high rate of economic growth. However, economic analysts have argued that the rate of economic growth in the 21 st century is slower compared to the 1960’s (Heijink, Koolman, & Westert, 2013). The slow economic growth of the US is attributed to various emerging challenges. It is projected that the health care spending will surpass national income in future, an event that may have detrimental effects on the population health if undesirable policies are implemented to counter the changes. The global financial crisis of 2008 disrupted the economic roots of many nations including the OECD. The rates of healthcare spending stagnated for three years (Heijink, Koolman, & Westert, 2013). Recent studies have shown that many nations in the OECD have recovered economically given the reduction in levels of unemployment, the creation of investment opportunities and increases national output (White, 2014). However, some countries are still grappling with high budget deficits. The in-depth analysis of the spending trends reveals that the spending rates are higher.
The healthcare system has been affected significantly by the technological adoption. The US has focused more on developing technologies that will increase efficiency. As a result of intense research and development in the technological field, the healthcare system in the US boasts of robust technologies in medicine. Some of the technologies are expensive to develop and sustain in the foreseeable future leading to the constant debate of the efficacy and viability of advanced medical technologies (Lamiraud & Lhuillery, 2016). Multiple kinds of research have highlighted that the increasing cost of health care is attributed to healthcare technology (White, 2014). Healthcare technology enhances the lives of the patients. For instance, technologies have been developed to treat conditions that were posing problems for the medics. With the results of the technology evident to stakeholders, the government and other stakeholders in healthcare have increased funding (Lamiraud & Lhuillery, 2016). However, the increased funding comes at a cost for the patients. The cost of healthcare has grown exponentially. Such implies that only the people with high levels of income can afford some treatment involving the advanced medical technologies.
The high-income inequality in the US relegates the low class to seek medical attention in health institutions with less advanced technologies (Beilfuss & Thornton, 2016). The level of technology in health facilities is directly proportional to the health outcomes. Consider a patient who visits a public health facility, which is overcrowded due to restraint in resources and another person who visit a well-equipped and resourced private health institution. Hypothetically, a person who visits a private health institution has a higher chance of recovery compared to the fellow who visits an overcrowded public health center. In any case, it is critical to note that the level of income determines which hospital an individual will visit in case of an infirmity (Heijink, Koolman, & Westert, 2013). The level of income determines the health care spending of an individual. High level of income means that the person will afford a high health insurance scheme that is comprehensive. On the other hand, low-income level makes an individual rely on public health insurance schemes such as the ACA, which may fail to cover the cost of treatment of some conditions. The health outcomes attributed to technologies have two facets.
The element of affordability plays an instrumental role in the healthcare system (Beilfuss & Thornton, 2016). As discussed earlier that technologies increase health care spending, it is evident that the ripple effects of increased healthcare expenditure have undesirable consequences to the citizen in low socioeconomic class. At a macro level, nations with limited or less advanced healthcare technologies have a low life expectancy. Again, at a micro level, for instance, in the context of a single society, the life expectancy is lower for people at the bottom level of the socioeconomic pillar. Such implies that the healthcare outcomes are directly related to the individual financial base. Solid financial base increases life expectancy as the person can afford healthcare services in healthcare institutions with well-equipped technologies and resources (Ng & Ng, 2016).
Conclusively, the US stands out as a significant player in the world economic decision due to its high GDP compared to other nations forming the OECD. The increasing health care spending in the US is attributed to the economic growth the country has experienced over the past years. Additionally, adoption of healthcare technologies has a direct impact on the increased healthcare spending in the US. However, the healthcare outcome depends on the affordability of the services. The higher the earnings of an individual, the better the healthcare outcomes. Through policy changes, the health care spending system can favor all the citizens regardless of the socioeconomic class.
References
Beilfuss, S. N., & Thornton, J. A. (2016). Pathways and hidden benefits of healthcare spending growth in the US. Atlantic economic journal , 44 (3), 363-375.
Gearhart, r. (2016). The robustness of cross-country healthcare rankings among homogeneous OECD countries. Journal of Applied Economics , 19 (1).
Heijink, R., Koolman, X., & Westert, G. P. (2013). Spending more money, saving more lives? The relationship between avoidable mortality and healthcare spending in 14 countries. The European Journal of Health Economics , 14 (3), 527-538.
Lamiraud, K., & Lhuillery, S. (2016). Endogenous technology adoption and medical costs. Health economics , 25 (9), 1123-1147.
Ng, E. C., & Ng, Y. C. (2016). What explains the total factor productivity gap between OECD economies and the US?. Applied Economics , 48 (32), 3005-3019.
White, J. (2014). The challenge of budgeting for healthcare programmes. OECD Journal on Budgeting , 14 (1), 73-107.
