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Health Care Issues in the United States and Japan$
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David A. Wise and Naohiro Yashiro

Print publication date: 2006

Print ISBN-13: 9780226902920

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226903248.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 26 September 2021

An International Look at the Medical Care Financing Problem

An International Look at the Medical Care Financing Problem

(p.69) 3 An International Look at the Medical Care Financing Problem
Health Care Issues in the United States and Japan

David M. Cutler

University of Chicago Press

This chapter emphasizes that, as populations age and medical spending rises, medical systems will account for an increasing part of economic activity. It is noted that demographic change will present a financing hurdle for all developed countries. It is also assumed that medical costs increase at all ages by 1 percent per year above the rate of per capita gross domestic product (GDP) growth. Continued increases in costs result in disproportionately large increases in the size of the medical sector. There are three possible ways to pay for the coming medical care burden: firstly, increase revenues from people currently alive to pay for medical care in the future; secondly, wait until the future and then tax working generations to pay for the increased medical care burden that future elderly will incur; and, finally, make people pay more for medical care when they use services, especially at older ages.

Keywords:   medical spending, populations age, medical systems, financing, medical costs, gross domestic product, medical care, tax

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