U.S. Health Care Spending: The Big Picture

Key Points From This Brief:

• Total spending on health care in the U.S. accounted for almost 18 percent of GDP in 2010 — about 50 percent higher than in the next closest comparable developed countries — and is projected to reach nearly 20 percent in the next decade.
  
  
• In the past 3 years, spending has grown at its slowest pace in 50 years, largely as a result of the recession. However growth has actually been slowing every year since 2001, signaling the presence of other influences beyond the economic downturn.
  
  
• Despite this slowdown, health spending growth has consistently outpaced economic growth, with an average “excess cost growth” of 1.5 to 2.5 percentage points depending on the time period and program considered.
  
  
• Because it accounts for a large share of total spending and is growing rapidly, the hospital sector was responsible for almost 40 percent of the increase in per-capita health spending between 2006 and 2010. Higher spending on physician and clinical services and on home health and other long-term care accounted for another 35 percent of the per-capita spending increase.
  
  
• Reliance on public sources of financing has grown appreciably over the past 25 years, with nearly all of the increase coming at the Federal level through higher outlays for Medicare and Medicaid.
  
  
• Despite increases in real out-of-pocket payments for health care services, the share of personal health care spending paid directly through out-of-pocket payments has fallen dramatically as public and private insurance programs have grown in significance.