President

Chapter 4: The Importance of Health andHealth CareThe American health care system is an engine for innovation that developsand broadly disseminates advanced, life-enhancing treatments and offersa wide set of choices for consumers of health care. The health care systemprovides enormous benefits, but there remain substantial opportunities forimprovements that would reduce costs, increase access, and improve quality,thus providing even greater health for Americans. Chapter 4 examines theeconomics of health and health care. The key points in this chapter are:• Health can be improved not only through the appropriate consumptionof quality health care services, but also through individual behaviors andlifestyle choices such as quitting smoking, eating more nutritious foods,and getting more exercise.• Health care has enhanced the health of our population; greater efficiencyin the health care system, however, could yield even greater health forAmericans without increasing health care spending.• Rapid growth in health care costs and access to health insurance continueto present challenges to the health care system.• Administration policies focus on reducing cost growth, improvingquality, and expanding access to health insurance through an emphasison private sector and market-based solutions.Chapter 5: Tax PolicyEconomists and policymakers have long debated the appropriate role ofthe government in a market economy. The government can provide publicservices and transfer payments to lower-income individuals, but these benefitsoften come at the cost of higher taxes and lower economic output. The keypoints in this chapter are:• The ratio of federal taxation in the United States to gross domestic product(GDP) has fluctuated around an average value of 18.3 percent over thepast 40 years; despite the President’s 2001 and 2003 tax relief, this ratiowas 18.8 percent in 2007, above the 40-year average. Under current lawrevenues are predicted to grow faster than the economy in coming years,raising the level of taxation well above its historical average.Overview | 21