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The increase in the national health cost stems from the local government expenditure. Therefore, the outlook of one local government seems to be similar from a broader perspective. By 2008, the value of the healthcare plan per citizen was pegged at a 16.2% of the Gross Domestic Product, and the rate is projected to be on an annual increase of 4.4 percent. This means that, the overall budget plan will increase. The increase raises a common question about the sustainability of the plan on the provision of Medicare and Medicaid Services.

It is critical for the local government to analyze why there are huge increases in the cost of medical care; there is a need to divide the total health care expenditure into smaller units. Centers for Medicare and Medicaid Services put the hospital care at 31% while clinical services accrue 21% of the total. This is important considering the various challenges facing American citizens. An increase in these two important medical facets places a huge increase in the national health bill. With changing lifestyle, disease and demography, the current and future health needs will affect the spending plan.

The major driver in the cost of health is technology. Its contribution factor in the general management of health care ranging from administration, operations, specific medical and intensive care cannot be underrated. Technology has been on the upward because it is driven by new challenges facing the sector as well as the sophisticated demand. The resource invested by the firms in Research and Development is enormous, and the only means the cost can be recovered is by charging the state. Technology is a consumer and demand generated product in a free economy. Therefore, corporations seem to be comfortable in dictating their prices where the state is only left to fit the bills.

The use and consumption of prescription drugs has been reducing for a number of years. However, the cost of the drugs has been increasing over the same period. This leaves the same effect on the previous level on the overall cost. The main driver in this area is linked technological and development costs. Medical firms conducting and coming up with new drugs need to recoup their cost and profit. Thus, drug producers have been charging their research costs to the consumer; thus, an increase in prices. Additionally, the demand for drugs is consumer driven. This means that their cost match the current demand, giving it a potential source for increased medical costs.

The US has been facing a greater prevalence in the chronic diseases. This problem develops a demand for long-term nursing homes as well as a need for a long time treatment on ongoing illnesses. With the changing health demography, the estimates for such needs are high. In fact, the Centers for Disease Control and Prevention estimate the chronic treatment is above 75% of the national health expenditure. Consequently, an increase in the prevalence of chronic ailments increases the demand for drugs and medical facilities. In turn, larger budgets must be allocated to meet the increase in medical costs.

In conclusion, an increase in the health care costs is both a challenge to the local governments as well as the citizens. The need for a medical plan that is efficient and effective is ideal. However, it is also important to justify the plan on the context of a national interest. Therefore, managing its cost is not a single state responsibility; it is also the responsibility of the citizens. Thus, citizens should be accountable for their lifestyles and general care.

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