ABSTRACT
This chapter examines the problem of healthcare costs, factors that have contributed to their escalation, and attempts to restrain costs. Healthcare expenditures in the United States have been rising faster than the general growth rate of the economy. The federal government uses the tax system to subsidize the purchase of healthcare. Expenditures for prescription drugs have been the third-largest category of national healthcares expenditure over the years. The calculation of healthcare expenditures is a function of prices multiplied by the quantity or volume of consumption of healthcare services. When discussing national healthcare expenditures, it is important to note that they are concentrated heavily among certain segments of the population. The United States spends more money on healthcare than any other member country in the Organisation for Economic Cooperation and Development. The rapid proliferation of healthcare technologies has raised concerns in many quarters about their cost and the strain they put on the nation’s resources.
