US Health And Healthcare Spending In The Last 25 Years: Gains And Costs

As an overall pattern over the decades, spending in the US health care has been rising, both on a per person basis and as a share of GDP, and a number of health outcomes have improved. Are the benefits worth the costs? 

Jeffrey Selberg, Bradley Sawyer, Cynthia Cox, Marco Ramirez, Gary Claxton and Larry Levitt tackle the question "A generation of healthcare in the United States: Has value improved in the last 25 years?" in a short essay published by the Peterson Center on Healthcare and the Kaiser Family Foundation (December 6, 2018).

In terms of health care costs: "In 1991, the GDP attributable to healthcare was 12.8% or $788 billion. In 2016, healthcare consumed 17.9% of GDP or $3.3 Trillion."

In terms of health care status: "Between 1991 and 2016, life expectancy increased by 3.1 years to 78.6, representing a 4% improvement. In the same time, disease burden (as measured by the total number of disability-adjusted life years, or DALYs) improved by 12%.

Disease burden is comprised of two factors: years of life lost to premature death, which improved by 22%, and years living with a disability, which worsened by 2%. The improvement in overall years of life lost was driven by a remarkable 36% reduction in years lost due to premature death from diseases of the circulatory system. At the same time, the worsening of years living in disability was led largely by an increase in substance use disorders. Moreover, substance use is one of the primary contributors to the slight decline in life expectancy in 2015 and 2016, the first time life expectancy has dropped two years in a row in several decades. Another critical outlier where outcomes have worsened in the U.S. (and not other comparable countries) is maternal mortality, which has gone up significantly from 14 deaths per 100,000 live births in 1991 to nearly 31 in 2016."

Again, are the benefits worth the costs of health care spending? There are at least three ways to tackle this question, none of them fully satisfactory.

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