Abstract

Escalating health-care costs are a concern of every country. This rising cost is a result of advanced technologies, aging population, increased utilization, and is compounded with burdensome health-care administrative costs. This concern triggered many discussions to seek acceptable and effective ways to contain cost. For example, recent discussion of US Medicare Fund’s ability to cover all the retirees in the future has caused many debates on Medicare coverage. Many employers are exerting pressure on providers to reduce health- are costs. Some employers, such as large automobile manufactures, claim the cost of providing health care to their workers has surpassed the cost of raw materials needed for automobile production. From the health-care policy perspective, how much should each nation spend on health care and are these dollars being spent effectively? What measures do we have to gauge the value of health-care spending?