Faster than a speeding bullet: the growth in health expenditures since 1950

Victor Fuchs, Stanford University, has written a brief (5-page) article on the explosive growth in health care expenditures from 1950 to the present.  Fuchs positions this growth as “one of the most important economic trends in the United States in the post-World War II era” and supports that claim with some brief analysis and a couple of head-spinning comparisons:

• health care spending has gone from representing 4.6 percent of gross domestic product (GDP) in 1950 to more than 17 percent in 2009
• per capita expenditures (2009 adjusted dollars) has risen from $407 to $6,807 in the same time span
• out-of-pocket expenditures represented 56 percent of 1950 health expenditures; in 2009, they represented only 14 percent

Beyond the actual dollars being spent, Fuchs takes a quick look at the changes over time in the sources of payment and the health services being purchased, hospital operations, physician practice, and overall changes in the structure of the health care delivery system.

He ends by identifying some of the more pressing dilemmas facing anyone (or any political party) interested in successful reform, but points out the sad fact that, ” . . . every past prediction of a sustained slowing of the growth of health expenditures has been proved wrong.”  It makes one wonder if Sisyphus had it so bad after all.

Source: Fuchs, V.  Major trends in the U.S. health economy since 1950.  New England Journal of Medicine.  366(11):973-977, March 15, 2012.  Full text: http://www.nejm.org/doi/pdf/10.1056/NEJMp1200478