ACCY161_Fa10_Notes25_Healthcare

ACCY161_Fa10_Notes25_Healthcare - ACCY 161 Fall 2010 Class...

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ACCY 161 – Fall 2010 Class Notes #25 – Accounting for Healthcare Chapter 17 ACCY161Fa10_Notes25 Page 1 of 5 I. Class Comments 1. Exam #3 next Tuesday, December 7th – see exam web page on the class web page 2. Final exam the following Tuesday – December 14 th II. Why Accounting for Healthcare is Important A. General cost of healthcare – a microeconomic view Why Does U.S. Health Care Cost So Much? (Part I) November 14, 2008 New York Times , By Uwe E. Reinhardt, an economist at Princeton The graph tells a compact story of United States health spending relative to that of other nations. Shown on the horizontal axis is the gross domestic product per capita in 2006. The vertical axis represents 2006 health spending per capita. The data points in the graph represent two dozen developed countries that are members of the Organization for Economic Cooperation and Development (O.E.C.D.). The data are expressed in Purchasing Parity Dollars (PPP$). This metric is designed to adjust for cross-national differences in the purchasing power of national currencies relative to the real goods and services. One can think of PPP$s as dollars that buy roughly the same basket of real goods and services in different countries. B. Federal social insurance costs – a macroeconomic view Social Insurance: For the ‘social insurance’ programs --Social Security and Medicare-the Statement of Social Insurance (SOSI) reports: (1) the actuarial present value of: all future program revenue (mainly taxes and premiums) - excluding interest -to be received from or on behalf of current and future participants; (2) the estimated future scheduled expenditures to be paid to or on behalf of current and future participants; and (3) the differ- ence between (1) and (2). Amounts reported in the SOSI and in the supplemental information in this
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