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The economic activity of nations deriving from internal consumption
is always tied to the national amount of disposable incomes of the
citizens or residents within the nations. Without doubt the disposable
income which an individual has to spend in support of the economic
activities, however, depends directly on the amount of the compulsory
expenses that must be made. Health-care costs is one of those
essential expenses for
many persons. Hence the lower the health-care cost the more
disposal income such persons have and can spend to boost the national economy.
Several nations already have
put in place
National Health-Care Programs that provide health insurance for all
natural persons legally residing within the territorial boundary
of the specific nation. Such nations that have implemented National
Health-care Programs, of course, may not really understand the disposal income
growth factor of the programs as it will have already become an
intrinsic aspect of lifestyle of the citizens. However, for nations
that have not implemented a national health-care program and is
considering it, factoring the prospects for disposable income
growth in the decision making is crucial.
Of particular significance in
considering disposable income is the fact that the cost of health care
in every country has been rising as more and highly expensive
technologies are developed and deployed towards providing
health-care. In tandem with this growth of the health-care costs is
also the cost of insurance premiums - that is for nations with
health insurance services. Of course, with the rising costs of
health-care, the disposable income of the working citizens
depletes, as more money is spent for health-care costs.
Several reasons account for the
increasing cost of the health-care premiums. First regarding the
premiums, a Health Insurance Company by operation is patterned after
a Business Trust or is actually legally organized as a Business
Trust. So everybody who gets to be admitted as an insured becomes
both a funding grantor as well as a beneficiary. As a grantor, the
insured must contribute installments towards the fund-pool; and as a
beneficiary when the cost is incurred, the company then pays out an
agreed amount to the beneficiary. In essence, this is the modus
operandi of the Health insurance companies. However, because the
cost of each pay-out can be more than
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the installment payment of any one insured, it is necessary that
the pay-out does not exceed a certain percentage of the total funds
available, less other insured may become deprived in the event that
the need for several consecutive pay-outs to insured arises.
Undoubtedly, this is a well-reasoned approach, if only this posture
accounts for the limiting of pay-outs or cancellation of membership
of a sickly person amongst the insured . Unfortunately, the senior
executives of most healthcare companies forgetting that they work in
a mutual care business, also forget the mantra of being "my brothers
keepers" and surreptitiously games the system for their own benefit
by contracting to apportion to self large portions of the funds,
effectively making the pool-funds smaller and therefore forcing the
cancellation of membership of people who are otherwise worthy
members.
In any case as the cost of
healthcare increases, the insured-members' payments must
necessarily increase correspondingly, and consequentially cause the
depletion of their disposable incomes during economic times when salaries
are not rising in pace with cost of living. Of course, as
consequence there follows the slow-down in economic activities.
There are two factors of salient
consideration for healthcare companies: First factor which is with respect to the modus operandi is that there is the need for large number of
people to become members and fewer persons becoming sick. The second
factor that the smaller the portion of the funds
that the senior executives apportion to self, the larger the
pool-funds available and therefore the better the financial strength
of the company to address the payouts of members, or inversely the lower the
premiums needed by an insured to remain a member of the company.
The Disposal Income Growth-factor
The implementation of a National Health-care Program by a
government, however, is in the interest of all citizens of a nation:
Needless to state, of
course, that vigorous economic activity is always a preferred goal
of nations because of the multiplier effect of such economic state:
Everybody's net wealth value increases as a
result; Industrial output increases, more jobs are created, the
government revenue base and volume increases and the revenue widens,
resulting in higher standard of living, and
better bargaining
position for a nation in its relationship to other nations.
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The implementation of such programs however
may seem initially to cost more than the sum
total of the premiums being paid to the healthcare companies
as of the time of the implementation. Yet careful reasoning usually
makes obvious that the programs
costs less in the long run, in fact with good overall return to the
nation.
A good starting point therefore is thought investment analysis of the
implementing such a program within a given nation. Indeed, the significant
feature of
the government provided national healthcare program
is that the government actually is choosing to invest
in the citizenry. Admittedly, a portion of the current revenue is spent to set
up the infrastructure for the delivery of the national health care
program, and even some more portion is spent to enable the poor and the
working poor become members of the insurance companies.
However,
often overlooked is that a nation is in fact a kind of Business Trust, every bit as the insurance companies,
but simply larger and
also consigned with some other responsibilities. Viewed through this prism,
the Disposal Income growth is enabled by the differences in the
methods by which the government makes its calculations of the return
on investments in the money spent to maintain the insurance services
from the methods by which the actual insurance companies make their
profit calculations. In general the government makes its calculation
by including the vibrant economic activities resulting from the
disposable incomes being spent by the poor while also taking into account,
the multiplier growth-effect of such vigorous economic activities.
The contribution of the multiplier
effect which is available to the government in calculating her ROI
but not available to a corporation naturally enables a government to
set lower premiums relative to an insurance corporation, and
thereby increasing the disposable income of members, and
consequentially the effecting the vigorous economic activity with
the resultant multiplier
effect. This pervasive
benefits -derivative of the increase in disposable income - to all
including most assets-owners, who also continue to enlarge their
financial worth, and of course also to the government, clearly
buttresses the need for national health-care
programs. There are however still very many nations that have not as
yet implemented such programs, although all
nations should; if for nothing else then because for the economic
growth factor.
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