The health care industry in America consists of different sectors within the economic system…

1. Introduction
   The health care industry in America consists of different sectors within the economic system
   that provide goods and services for treating patients. It is made up of 784,626 companies, which
   create and sell goods and services suitable for maintaining and improving health (Niles, 2019).
   The industry employs 1 in 8 United States citizens with the average employee salary standing at
   US$60,976. The sub-industries and sectors in the healthcare industry include; biotechnology,
   pharmaceuticals, distribution, equipment, facilities, and managed healthcare. The industry
   accounted for close to 18% of the country’s gross domestic product (GDP) by the end of 2019,
   with an estimated revenue of US$2,487.7 billion (Advisory Board, 2020). Additionally, the
   industry has placed priority on areas of medical research, innovation, and technology.
2. Size and/or Growth of Industry
   The U.S. health care industry is expected to grow at an average rate of 5.8% through
   2020 due to population growth, high utilization of health care goods and services. Further, the
   percentage of GDP spent on health expenditures is expected to increase to 19.8% in 2020 from
   17.6% and 17.7% in 2010 and 2018, respectively (Advisory Board, 2020). The biggest driving
   factors of the health care industry in the United States are the aging population and the increasing
   prevalence of chronic diseases. The latest estimations indicate that the market size of the industry
   by revenue will increase by $808 billion by 2020, despite the effects of COVID-19 and demand
   destruction related to social distancing.
   The expected average annual rate of national health care spending will grow at 5.4%
   from 2019 to 2028, which would outpace the GDP’s average annual growth of 4.3%. Health care
   expenditure stood at $3.81 trillion in 2019 and is expected to reach $4.01 trillion in 2020, with an

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estimation of $6.19 trillion by the year 2028 (Advisory Board, 2020). The increase in spending
can be attributed to higher overall health care prices.

3. Macroeconomic Indicator or Policy and Its Importance and Impact
   One of the macroeconomic indicators that the health care industry should monitor is
   inflation. Inflation refers to the quantitative measure of the increase in the rate of average prices
   of goods and services in an economy over a given period of time (Zhou et al., 2020). It involves
   the rise in general level of prices where commodities bought for the same price goes down. With
   an increase in inflation rates, different stakeholders in the health care industry will suffer the
   burden of higher prices. Businesses will either drop commercial health coverage or shift the costs
   to beneficiaries while many citizens will become uninsured.
4. Recent Trend
   The rate of inflation in the health care industry stands at 4.47% for the month of August
5. This indicates a decrease in the rate over the last two months, where it had peaked at
   5.98% in June. At the end of 2019, the inflation rate in the health care industry was 4.57%, an
   increase from 2.01% at the end of 2018. The inflation rate for 2019 was 3.46%. However, the
   current rate of inflation is lower than the long-term average of 5.28%. the trend in inflation can
   be attributed to continued swelling of prices and stagnation in utilization of health care (Kacik,
   2019).

Source: https://ycharts.com/indicators/us_health_care_inflation_rate

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 5. Conclusion
The health care industry forms a critical part of the United States economy since it
supports the health and well-being of citizens. By the end of 2019, the industry accounted for
nearly 18% of the country’s GDP as the rate of growth in health care spending continues to rise.
Inflation is likely to impact the industry as prices increase and utilization stagnates. The trend is
likely to continue due to the economic effects and job losses occasioned by the COVID-19
pandemic.

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Sources

1. Niles, N. J. (2019). Basics of the US health care system. Jones & Bartlett Learning.
2. Advisory Board (2020, April 3). CMS: US health care spending will reach $4T in 2020.
   Retrieved, https://www.advisory.com/daily-briefing/2020/04/03/health-spending
3. Zhou, L. L., Ampon-Wireko, S., Brobbey, E. W., Dauda, L., Owusu-Marfo, J., &
   Tetgoum, A. D. K. (2020, June). The Role of Macroeconomic Indicators on Healthcare
   Cost. In Healthcare (Vol. 8, No. 2, p. 123). Multidisciplinary Digital Publishing Institute.
4. Kacik, A. (2019, June 20). Rising prices drive estimated 6% medical cost inflation in
5. Retrieved, https://www.modernhealthcare.com/providers/rising-prices-drive-
   estimated-6-medical-cost-inflation-2020