Americans spend $7K per person on health
January 21, 2008

By Dr. Manoj Jain

As 2007 was coming to a close, I was stocking up on several months' supply of my medications. A set of family illnesses had pulled us up above the deductible, so I was using the benefits of the insurance coverage.

Health care is expensive in America, even for those who have insurance and earn a doctor's salary. A recent report in the journal Health Affairs showed that the cost of health care for the nation in 2006 just exceeded 2 trillion dollars, which is nearly equal to the GDP (gross domestic product) of England.

It's hard to imagine $2 trillion -- but in simple terms its nearly $7,000 of health expenditure for every American. In other terms, according to my calculations, an average American spends the months of January, February and March earning to pay for his or her share of the health bill.

The rise in health costs have not occurred overnight; rather the $2 trillion number has doubled in the last decade. In fact, the figures from the Health Affairs article tell us that there has been a 6 percent annual rise in health care spending over the past three decades.

One wonders, where is all this money going? It is hospitals, doctors, nursing home/home health, drugs and administration that account for this expenditure.

For every health care dollar spent, according to the article, 31 cents goes to hospitals and nearly the same amount goes to physicians and for professional fees. Last year, one visit to the emergency room cost us $2,000. A doctor visit ranged from $80 to $200 dollars. Though expensive, all of this was necessary.

Drugs and medical products account for 13 cents of the health care dollar. A month's supply of a lipid-lowering medicine cost us $100 dollars before insurance, about $3 per pill.

Nursing home/home health services account for 9 cents of the health care dollars, and administration accounts for 7 cents of the dollar. Together it amounts to $2 trillion dollars.

So, where is this money coming from? Ultimately, we as consumers and taxpayers pay the bill, but of every healthcare dollar -- 40 cents comes from government programs, such as Medicare and Medicaid, 31 cents comes from household pocket books and 25 cents from businesses.

What scares me about the $2 trillion number is that there is no sign of slowing of our appetite for healthcare expenditure.

What can we do as a nation? I don't know. But for my part, in this new year I am going to try to keep our family health expenditure less than in the previous year.

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