Here’s What’s Really Driving Healthcare Costs

November 24 11:00 2017 by ushadmin

The US spends the most of any country in the world on healthcare in terms of percent of GDP, sitting around 18% as of the most recent data.

But to address the issue, we need to understand what is driving this increase, and a new study appearing in the Journal of the American Medical Association does the best job yet in decomposing the factors behind the rising costs.

That healthcare expenditures in the US are high and rising rapidly is nothing new, but this study appearing in the Journal of the American Medical Association identifies the exact components of healthcare that are driving those soaring costs. As F. Perry Wilson, MD points out in this 150 Second Analysis, the data suggest traditional economic forces break down in the US healthcare market.
Transcript:

It’s no secret that healthcare costs in the United States are exceedingly high, and rising.

The US spends the most of any country in the world on healthcare in terms of percent of GDP, sitting around 18% as of the most recent data.
But to address the issue, we need to understand what is driving this increase, and a new study appearing in the Journal of the American Medical Association does the best job yet in decomposing the factors behind the rising costs.

The researchers used data from the US Disease Expenditure Project, which utilizes 183 data sources and 2.9 billion patient records to quantify where each healthcare dollar is being spent in this country.

Here’s the top level overview. After accounting for inflation, healthcare expenditures increased by $933.5 billion between 1996 and 2013. To put that into perspective, that’s enough money to create 9 additional interstate highway systems. We could fully fund 3 NASAs every year.

Or we could provide 400 malaria nets to every man, woman, and child in Africa. We could even do something crazy like pay down the debt.

But to save money in the future, we have to know why we keep spending more. Here’s the breakdown…