Health Costs: Saving in the Private Sector

by Franklin Robeson



It is not difficult to document that the cost of medical care in the U.S. is rapidly increasing. The total national expenditure for health care has been increased significantly during the last decade. Presently, almost 8.5 percent of the country's annual gross national product is devoted to health care. In real goods and services purchased from the health care sector, however, the increase has not been as rapid as the total aggregate dollar amount. The reason for this slower growth is the higher rate of inflation experienced in the health care sector compared to the remainder of the economy. Health care expenditures are approaching $800 per capita per year in this country. In private sector, the impact of higher costs has been felt in terms of a rapid increase in the number of employer-provided health insurance plans. The rapidly escalating costs of health insurance programs have recently encouraged the private sector to investigate both causes and potential cures for the health cost malady.

California Management Review

Berkeley-Haas's Premier Management Journal

Published at Berkeley Haas for more than sixty years, California Management Review seeks to share knowledge that challenges convention and shows a better way of doing business.

Learn more
Follow Us