Health Spending Summary

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Summary of the Value of Life and the rise in Health Spending The article focuses on individual-level spending and willingness to pay to reduce mortality by elaborating on two key variables aggregate health spending and Life expectancy. These two factors are discussed at length using figure I and II, where they compare the consumption of health services with purchase of services or goods (not including investment in medical facilities) and project the historical growth in life expectancy towards the future. This article emphasizes on the fact that it uses constant which is crucial for understanding the rising health share. In Figure V this model looks back into the mid 1900’s and projects an average of 2.31 percent increase income of the population which would result in an increase in overall health sharing too. The two economic principles that counteract are diminishing marginal utility of consumption and the diminishing returns to the production of health. This model speculates that the health production elasticity declines very gradually, and the declining marginal utility of consumption dominates, producing a rising health share. Figure III estimates the elasticity of adjusted health status with respect to health inputs, by age …show more content…

Elasticity here measures the returns from health spending, in short the health production. It makes sense in saying that Younger age groups have more elasticity when compared to older age groups because of a couple of reasons. Firstly, the cost of health care and health expense is more in older age groups compared to the younger age groups and the second reason is that though the investment in elderly health improves the life expectancy it would not increase the productivity on the overall as, the health income generated through elderly population is low as they mostly utilize the Medicare and Medicaid services Provided by the

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