The costs of healthcare in the United States has skyrocketed over the last several years. According to CMS, as cited on unitedhealthgroup.com (2015) the GDP has grown from historically 11% to an estimated 19.6% by 2021. This trend indicates that the cost of healthcare in the US is rapidly excessing the income level of those who pay for it. Over 60% of employed individuals that receive healthcare benefits from their employers have experienced such a rise in premiums and out-of-pockets expenses that it has more than doubled between 1999 and 2008 (ssab.gov, 2009). While there are multiple components of the healthcare system and multiple populations that the healthcare system needs to cover one of the largest single population that will be a tremendous consumer of healthcare is the elderly population. As we have discussed many times throughout this class, the elderly population is growing by huge numbers primarily due to the baby boomer generation hitting retirement age. According to the American Hospital Association (2007) the aging Baby Boomers will cause the over 65 population to almost triple by year 2030. Along with this immense population group they will bring with them demands and challenges for the healthcare system as 6 out of 10 will be living with multiple chronic illness. With Medicare being the primary source of payment of healthcare in the over-65 age group it has been noted that the median annual out-of-pocket cost to Medicare beneficiaries will reach approximately 30% of their income by the year 2025 (ssab.gov, 2009).
As this population ages and gets into the category of the oldest of the old – the 85 and over age group the cost goes up significantly. As they grow older the high cost is realized for a larger number of prolonged years. This coupled with the fact that a significant amount of a person’s healthcare costs are incurred in the last year or so of life indicated that healthcare expenditure will continue to be a major cost for the US (nia.nih.gov, 2015).
How can we solve the healthcare crisis in the US? Kaplan & Porter (2011) have developed a very interesting theory for dealing with this crisis. They are proposing a model that measures the costs that are incurred to deliver patient care. Their argument is that instead of costing out the specialty or service department the costing should be focused on what it takes to treat the individual patient and the outcomes achieved. As we have also discussed in this class one of the main goals of a healthcare system should be valuable outcomes for the patient.

References
Kaplan, R. S. & Porter, M. E. (September 2011). The Big Idea: How to solve the cost crisis in health care. Harvard Business Review, Retrieved from https://hbr.org/2011/09/how-to-solve-the-cost-crisis-in-health-care. http://www.aha.org/presscenter/pressrel/2007/070508-pr-boomers.shtml. Retrieved June 10, 2015. http://www.ssab.gov/documents/TheUnsustainableCostofHealthCare_508.pdf. Retrieved June 10, 2015. http://www.unitedhealthgroup.com/~/media/UHG/PDF/2013/UNH-Roadmap-Transforming-America-Health-Care.ashx. Retrieved June 10, 2015. https://www.nia.nih.gov/research/publication/global-health-and-aging/assessing-costs-aging-and-health-care. Retrieved June 10, 2015.