The nation's health care bill

Abstract

During the past 50 years, spending on health care services—by households, private businesses, and state and federal governments—increased dramatically and now approaches one out of every five dollars spent in the United States. The benefits of health care spending have not been distributed equally across the population, with less going to a growing number of uninsured people. Moreover, the United States does not realize proportional value for its spending on health care. It spends more per capita than any of six other industrialized countries but ranks below them on measures of health care quality, efficiency, and equity.

Unable to sustain rising contributions to health insurance, employers are shifting
more of the cost to workers, thereby increasing the number who cannot afford
coverage. Federal, state, and local governments have taken on some of these costs by subsidizing the health services of elderly, disabled, and poor people. Health spending, once a small fraction of the federal budget, now exceeds spending on defense or Social Security. State and local governments now devote more of their own taxes to health care than to elementary and secondary education, despite the federal government’s paying for the majority of Medicaid spending.

The data in this chartbook indicate that the financial burden of health care
spending presents a disproportionate burden on uninsured and sick people, small businesses, and low-wage workers. In addition to the magnitude and maldistribution of health spending, society’s “opportunity costs” are high: Private businesses, households, and state and federal governments could have made other highly productive purchases had health spending not exceeded economy-wide growth. For the government, health care spending decreases the money available for other investments, such as education, infrastructure, and debt reduction. As health costs increase and the population ages, the historical reallocation of US productive capacity to health care is unsustainable. With pressing needs elsewhere, the country must make the health system more efficient, equitable, and affordable.

Passage of the Patient Protection and Affordable Care Act (ACA) by Congress
in 2010 was a comprehensive step to contain health care costs, particularly for
families, while extending health care coverage to millions of uninsured people.
The potential benefits of the ACA include better access to health professionals and prescription drugs, decreased medical debt and fewer subsequent bankruptcy filings, and lower labor costs for small businesses. Constrained health care spending will allow businesses and government to make more cost-effective investments elsewhere without raising prices or burdening taxpayers. With this chartbook as a baseline, users can monitor changes that result from the ACA and take future steps to enhance the cost-effectiveness of the US health care system.