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Economic Principles and NHE

Table 1 presents a breakdown of the sources of national health expenditures for selected years from 1970 through 2009. Comment on the changes in the categories of expenditure sources (i.e., out-of-pocket, third-party payers, and types of third-party payers), both year-to-year changes and over the entire period.

Table 2 presents a breakdown of public program payments for selected years from 1970 through 2009. Describe the situation state and local budget officials are facing, in economic terms, as they construct expenditure plans for Medicaid and other programs. Remember that Medicaid expenditures (which approximately account for over 20% of state budgets) are increasing each year at a rate that exceeds the rise in other spending categories (such as elementary and secondary education, which approximately accounts for 22% of state budgets) and revenue projections are approximately 4-5% over previous years. Explain how this typifies "the economic problem" and what economic principle it illustrates.

When analyzing these types of statistics, you will find it useful to present the data visually, such as by constructing a line graph or a bar diagram. A bar diagram will clearly show changes in values. You can use a Microsoft Excel spreadsheet to construct a graph.


Solution Preview

Alright, so I'll attach the graphs I've put together in excel so you can verify what I've written.

So, what doesn't need to be said is that total expenditure is rising over time. Between 1980 and 2000, out of pocket expenditures appear to have increased ...

Solution Summary

The economic principles and NHE are examined.