Health economics

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Every healthcare system has to be funded. Wealth and it's distribution is strongly related to health and healthcare as measured by multiple metrics. However prosperity which some have defined to include indices of well being may be a better index of status The relationships are important as they influence both individual health and health care systems.

First world healthcare economics

Health care expenditure as expressed as % of yearly GNP for some Western economies. This graph might suggest that GNP spent on health increases after a recession and does not decrease afterwards in Western democracies.

This is driven by demographics, wealth and social structure. Western democracies have been spending an ever greater proportion of their Gross National Product (GNP) on health care driven not just by demographics but also by health care technology inflation rates well above 10% since the 1970's. The effect of major economic down turn in such democracies is for governments to try to preserve healthcare spending for political reasons. This appears to have the consequence that by 2015 most Western democracies had doubled the 4 to 5% of GNP spent in the late 1960's on healthcare to 10 to 12% of GNP. The notable exception was the USA which as of 2015 was spending 16.9% of GNP on health care. Some economies such as the UK and Greece have recently reduced their portions of GNP spent on health. Invidious comparison suggests this may not be sustainable in the long term. The characteristics of the US healthcare system system which includes direct consumer advertising, poor cost regulation and high administrative burden have driven expenditure relative to Europe and Canada. Many systems have a fee for service model and indeed there is evidence that where this does not exist for the majority of health care (eg UK until 1990) there may be better cost control.

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