Question

Governments the world over spend a significant proportion of their Gross Domestic Product (GDP) on health. The government of Ghana spend approximately 5% of its GDP on health. Briefly discuss the rationale behind such healthcare expenditures

Answer 1

ANS

The amount of spending on healthcare system from the GDP of the economy varies in different economies due to several different reasons. Here we have taken examples of 3 countries which are Ghana, USA and India. Ghana is the part of South African nations and is one of the most developed amongst all the other South African nations, The USA is one of the most developed nations in the world and is known for its highly advanced technology and India is one of the best emerging economies in the world and is known for its highly economic medical systems. The spending by Ghana on its healthcare is nearly 5%, that of USA is nearly 14% and the spending by India is around 3.6%. These are majorly affected by the GDP and the Per Capita Income of the nations. It is found that higher the per capita income will be higher will be the spendings on the health. The Per Capita Income PPP of USA is 62,794.59 USD, that of India is 2,009.98 USD and the Per Capita Income PPP of Ghana is 4,650 PPP dollars. This means that higher the Per Capita PPP will be higher will be the spending on healthcare. The percentage of spending on heathcare also depends upon the mindset of the people. In India people are more inclined towards curing the healthcare problems in home and in USA the situation is exactly opposite, Indian economy is large;y affected by the constant habit of savings. The third and vital factor that leads to these expenditures is the cost of healthcare in different nations, the cost of healthcare in USA is very high so their spending also becomes high and that of India is fairly low and same goes with Ghana, their healthcare cost is also low.