A dozen facts about the economics of the US health-care system | Brookings

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The health-care sector is in many ways the most consequential part of the United States economy. It is a fundamental part of people’s lives, supporting their health and well-being. Moreover, it matters because of its economic size and budgetary implications. The health-care sector now employs 11 percent of American workers (Bureau of Labor Statistics [BLS] 1980–2019b and authors’ calculations) and accounts for 24 percent of government spending (Centers for Medicare & Medicaid Services [CMS] 1987–2018; Bureau of Economic Analysis 1987–2018; authors’ calculations).[1] Health insurance is the largest component (26 percent) of nonwage compensation (BLS 2019b) and health care is one of the largest categories of consumer spending (8.1 percent of consumer expenditures; BLS 2019a). A well-functioning health-care sector is therefore a prerequisite for a well-functioning economy. Unfortunately, the problems with U.S. health care are substantial. The United States spends more than other countries

Fact 1: U.S. per capita health-care spending nearly quadrupled from 1980 to 2018. Spending on U.S. health care has grown steadily, rising from $2,900 per person in 1980 to $11,200 per person in 2018 (measured in 2018 dollars)—a 290 percent increase (figure 1a). That growth has slowed at times, as in the mid- to late 1990s and early 2010s, but since 1980 it amounts to annualized growth in real per capita spending of 3.6 percent. From 2005 to 2018, growth has been slower (2.0 percent per year). A small part of the reason for this growth is the aging of the U.S. population. As shown in figure…

A dozen facts about the economics of the US health-care system | Brookings

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