The term “health care” encompasses many services and activities, ranging from primary health prevention to advanced clinical interventions. It also includes the broader social and economic contexts of health, such as housing, education, employment, family and community support, and religion. Health care is a crucial resource that enables people to fulfill their aspirations and satisfy needs, and achieve a good quality of life.
The concept of health is not static but rather changes as people live longer, develop new medical knowledge, and adapt to an evolving world. This is why health care research and innovation is important, as it helps to promote a dynamic system that continuously seeks to improve the quality of care delivered and to increase its effectiveness and efficiency.
Health care costs are growing faster than other sectors of the economy, but this is partly because the population is getting older and living longer. This has a direct impact on the amount of money that governments need to devote to health care, and the health care system’s ability to provide services.
As a result of these trends, the United States spends nearly twice as much per capita on health as its comparable peer countries. Some studies have suggested that high prices are a key driver of this excess spending, but these estimates have generally been difficult to quantify. This study makes a first attempt to identify components likely reflected in higher U.S. prices, and suggests that these accounts for approximately half of the U.S.’s “excess” spending.
Using data from the Centers for Medicare and Medicaid Services’ National Health Expenditure Accounts, this study compares total health spending by state and by type of service between 2021 and 2022. For each category, the growth rate is calculated in percent. The growth rates are then used to calculate the percentage change in real expenditures, which take into account price changes and other factors that affect the current nominal dollars spent on a particular service or category of service.
The study also looks at a range of factors that influence the growth in health expenditures, including the overall size of the health care workforce, health insurance costs, and the cost of medical equipment, supplies, and pharmaceuticals. The study examines the relative contributions of these factors to the growth in real health spending, and suggests that reducing costs related to administrative expenses and prescription drug pricing would significantly reduce the gap between U.S. and its comparable peers. This could be achieved by allowing consumers to choose their own providers and by implementing more aggressive selective contracting strategies. In addition, the study examines the effect of rising prices in other sectors on health expenditures, and finds that they have not yet had a significant impact on health spending. However, this does not mean that prices in other sectors will not eventually influence health sector prices in the future. See the full report for more detail on these findings.