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«CHAPTER 7 Balancing Private and Public Roles in Health Care H ealth care is one of the largest and fastest growing sectors of the U.S. economy, ...»

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Preparing for Public Health Emergencies The Federal Government plays an important role in ensuring a timely and appropriate response in the event of a public health emergency, such as an influenza pandemic or a bioterrorism threat. These types of situations could potentially lead to high levels of illness, social disruption, and economic loss, and therefore it is important for the Federal Government to invest resources in developing strategies to prepare for them. Working in collaboration with the States, the Federal Government has provided funding, advice, and other assistance to State and local planning efforts.

Supporting Research Health-related research is multidisciplinary. It includes biomedical and epidemiological work that can reduce a population’s mortality and morbidity risks from disease; economic analyses that investigate consumer and provider decision making; and health services research that examines issues such as medical care utilization, quality, and access to services. Americans rate health research as a high national priority. For fiscal year 2009, Federal funding for the National Institutes of Health is $29.5 billion. These resources will be used predominantly for supporting more than 38,000 research grant awards.

It is beneficial to have a balance between investments that support biomedical 214 | Economic Report of the President research and those that address critical issues pertaining to the delivery and financing of health care, particularly given the substantial amount of resources that are going to be required to meet the medical care needs of the population in future decades.

Promoting Global Health Improvement Many nations across the world are developing strategies to deal with consequences from the broad transmission of serious diseases, including HIV/ AIDS, malaria, and tuberculosis, among others. In less developed parts of the world, people who contract these diseases face a much higher risk of mortality than do people in more developed parts of the world. There is also a significant economic impact from disease. In addition to the direct costs of medical treatment, high rates of serious disease within a population can hinder economic development. For example, HIV/AIDS may lead to largescale losses in work productivity as the disease progresses and leaves those who are infected and their caregivers unable to work. Studies suggest that the high rate of HIV/AIDS has reduced the average national growth rates in African countries by 2 to 4 percent per year. Over the long term, high levels of disease also may inhibit educational investment, as shorter life expectancy diminishes incentives for human capital investment.

In 2003, the United States took a leadership role in supporting HIV/AIDS treatment, care, and prevention programs around the world, including in 15 countries that together have half of the world’s HIV infections: Botswana, Côte d’Ivoire, Ethiopia, Guyana, Haiti, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Vietnam, and Zambia.

Known as the President’s Emergency Plan for AIDS Relief (PEPFAR), this program has supported more than 57 million HIV counseling and testing sessions and has supported care for more than 10.1 million people infected or affected by HIV/AIDS, including more than 4 million orphans and vulnerable children worldwide. Additionally, through September 30, 2008, PEPFAR supported antiretroviral treatment for approximately 2.1 million people and prevention of mother-to-child transmission interventions during more than 16 million pregnancies. In 2008, Congress extended this program for an additional 5 years and significantly increased its authorized funding level.

A second global health initiative pursued by the Administration has been prevention and treatment of malaria. Each year, more than 1 million people die of malaria, most of them young children in Sub-Saharan Africa. It also causes serious morbidity, as those who are infected tend to lose, on average, 6 weeks from school or work due to the illness. Spending related to the disease can account for as much as 40 percent of public health expenditures, as well as high levels of household out-of-pocket expenditures. Beyond imposing high medical costs and lower incomes due to absenteeism, malaria

Chapter 7 | 215

is likely to impose indirect costs through broader macroeconomic channels, including underdeveloped tourism industries and lower levels of foreign direct investment.

In June 2005, the President’s Malaria Initiative was announced.

This initiative represents a public–private partnership among the U.S.

Government, nongovernmental organizations, corporations, foundations, and faith-based service organizations, with the goal of reducing the mortality rate from malaria in 15 African countries by 50 percent. In 2007, the initiative’s second year, 25 million people in Sub-Saharan Africa are estimated to have benefited from the program. More than 6 million long-lasting, insecticide-treated mosquito nets have been purchased, with two-thirds of those nets distributed.


The U.S. health care system is at a critical juncture. While advances in medical technology help millions of Americans lead longer and healthier lives, the rising cost of health care is both threatening the ability of Americans to access care that is affordable and is increasing the strain on Federal and State budgets. There are several opportunities to increase the value of health care and improve health insurance coverage. This Administration has pursued policies to improve the efficiency of health care markets through increased consumer involvement, improved choices, information transparency, and incentives to providers for delivering high-quality, efficient care.

This Administration has also pursued policies to improve the health insurance options of Americans. With the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Medicare was expanded to provide beneficiaries with improved access to affordable prescription drugs. Additionally, this legislation created Health Savings Accounts, which, in combination with High Deductible Health Plans, give individuals the incentive to become more active decision makers regarding their health care and health investments. Finally, this Administration has held to its commitment to make important investments in public health, including the expansion of Health Centers, collaboration with States and local governments to prepare for potential crises or threats, support of health-related research and development, and promotion of global health-improvement initiatives.

216 | Economic Report of the President

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