The health system is fragmented, with many public and private payers, and with the regulation of these payers divided between states and the. The independent source for research, surveys and news on health policies. KFF policy research provides data and analysis on a wide range of policy issues and public programs. KFF designs, conducts and analyzes original public opinion research and surveys about Americans' attitudes, knowledge, and experiences with the health care system to help amplify the public's voice in main national debates.
KFF Health News is a national newsroom that produces in-depth journalism on health issues and is one of the organization's main operating programs. Have healthcare costs changed over time? Trends in health spending What factors contribute to U.S. health care spending? UU.? Factors that drive health spending How does healthcare spending vary among the population? Variation in spending What impact do healthcare costs have on financial vulnerability? Impact on financial vulnerability How much is healthcare spending expected to increase? Expected spending growth Health care costs in the United States generally grow faster than inflation. Per capita health spending far exceeds other large and rich countries, and health care represents a much larger proportion of the U.S.
economy. UU. The health system is facing disparities and gaps in coverage. High spending on health care in the U.S.
It doesn't consistently translate into better health outcomes. Conversely, rising health care costs contribute to Americans struggling to afford health care and drugs, even among those with insurance. Many people are familiar with the high and rising cost of healthcare in the United States by seeing how much they spend on their own health insurance premiums and on out-of-pocket expenses. In addition to these highly visible health costs, there is also tax money that goes to fund public programs and the amounts that employers spend to pay for their employees' health insurance premiums.
Total national health expenditures include expenditures for public programs and private health plans, as well as out-of-pocket health expenses. Total health expenses represent the amount spent on medical care (such as doctor visits, hospitalizations, and prescription drugs) and related activities (such as overhead expenses and insurance profits, health research and infrastructure, and public health)). Today, healthcare accounts for about 18% of the U.S. (measured as a proportion of gross domestic product or GDP).
In other words, nearly 1 out of every 5 dollars spent in the U.S. In 1960, health spending represented only 5% of GDP, or 1 out of every 20 dollars in the United States. The economy was spent on health care. Out-of-pocket costs have also increased over time.
Out-of-pocket costs represent the amount of money people spend on health care that isn't covered by a health insurance plan or a public program, such as Medicare or Medicaid. This includes cost-sharing, the most common forms of which are deductibles (an amount that must be paid before the plan covers most services), copayments (fixed dollar amounts) and coinsurance (a percentage of the charge for services). That is, out-of-pocket expenses do not include the amount spent on a person's monthly health insurance premium. Over the past few decades, health spending has been driven upward by a number of factors, including, but not limited to, the aging of the population, rising rates of chronic diseases, advances in medicine and new technologies, higher prices and the expansion of health insurance coverage.
While there are always differences between countries, many of these factors cause healthcare costs to rise in the U.S. They are also driving the growth of health costs in peer countries. In fact, the population is aging and that is increasing health costs. Many large, wealthy nations have populations that age even more rapidly.
Other factors may explain the relatively high healthcare expenditure in the United States compared to its peers. The health system is fragmented, with many public and private taxpayers, and the regulation of these taxpayers is divided between states and federal government. However, these features aren't entirely unique to the U.S. In fact, some other countries with much lower health spending have multiple private payers or differences in public programs between states or provinces.
Nor is it the only one that has a payment system that is primarily pay-per-service. The health insurance system is largely voluntary, while the health systems of counterpart countries are almost completely mandatory. Federal and state governments have generally done less to regulate or directly negotiate the prices paid for medical services or prescription drugs than the governments of equally large and wealthy nations. They often pay higher prices for the same prescription drugs, hospital procedures and brand-name health care than equally large, wealthy countries.
Other factors, largely beyond the control of the health system, are probably also at play, such as socioeconomic conditions (such as income inequality and other social determinants of health) and differences in so-called lifestyle factors (such as diet, drug use or physical activity), that could contribute both to increasing spending and to worsening outcomes. Dividing total national spending on health into its components can reveal what are the main factors driving health costs and where cost-containment initiatives could be most effective. The following charts show several ways to examine the major contributors to health spending. For example, national health expenditure accounts show trends in the way in which health spending varies depending on the type of service (for example, the retail sale of prescription drugs) or depending on the source of funds (for example, an alternative and relatively new approach to understanding health spending is to break down total health spending in the proportion that goes to the treatment of certain diseases (e.g.Finally, health spending can also be better understood by looking at price trends (e.g., an alternative way to examine the components of health spending is to use the satellite health care account of the Office of Economic Analysis (BEA), which estimates spending and price growth by category of illness (e.g., this approach differs from the official categorization of health spending by type of service (e.g., the new satellite account redefines the “basic product of health care” as a treatment for specific illnesses, rather than a hospital stay or a doctor visits. BEA researchers found that the most important categories of spending on medical services include the treatment of circulatory diseases (10.4% of healthcare spending in 2002), musculoskeletal conditions (9.4%) and infectious diseases (9%).
Another significant part of healthcare spending (15.1%) goes to “ill-defined diseases”, which may include routine checkups and follow-up care that is not easy to assign to a particular illness. Spending on health services generally depends on prices (for example, individuals and health plans in the U.S.) USA, USA UU. They often pay higher prices for the same prescription drugs or hospital procedures than people in other large, wealthy countries. As for utilization, there isn't much evidence that people in the U.S.
In fact, Americans tend to have shorter hospital stays and fewer doctor visits per capita on average. Therefore, much of the difference in health spending between the U.S. UU. And their peers can be explained by rising prices, rather than increased utilization. Over time, in the U.S.
In the 1980s and early 1990s, rising healthcare prices far outpaced growth in usage. Fastest growth in healthcare prices in the U.S. UU. During this time, it fueled the divergence in per capita health spending between the U.S. And other large and rich OECD countries.
While healthcare prices have grown more moderately in recent decades, the prices of health services in the U.S. The U.S. continues to outperform what other countries pay. A small part of the population accounts for a large part of health spending in a given year.
While we tend to focus on averages, a small number of people spend around the average, as individual health needs vary across the lifespan. Some sectors of the population (older adults and people with serious or chronic illnesses) require more health services and are more expensive than those who are younger, healthier or need fewer services or are less expensive. People with significant health needs account for a large part of total health spending. People who report having a regular or poor state of health represent 11% of the population and 27% of total health expenditure.
When health care is unaffordable, it can create cost-related barriers to access, such as giving up or delaying needed medical care. For those who still receive unaffordable health care, this care can lead to medical debt and other forms of financial instability. Some people face both types of affordability issues, losing some of the care they need while incurring medical debt for other types of care. Adults say it's hard to pay for health care costs, and one in four say they or a family member have had trouble paying for health care in the past 12 months.
Younger adults, people with lower incomes, adults in regular or poor health, and people without insurance are particularly likely to report problems paying for health care in the past year. Among those under 65, uninsured adults are more likely to say that it is difficult to pay for health care costs (82%) compared to those with health insurance coverage (44%). Those who are covered by health insurance are not immune to the burden of health care costs. About 4 out of 10 insured adults worry about paying their monthly health insurance premium, and 62% worry about paying their deductible before health insurance takes effect.
In fact, a large proportion of adults with employer-sponsored insurance (ESI) and those with Marketplace coverage rate their insurance as “regular” or “poor” when it comes to the monthly premium and out-of-pocket costs to see a doctor. According to a KFF survey, a quarter of adults say that in the past 12 months they have skipped or postponed the medical care they needed because of the cost involved. Women are more likely than men to say they have skipped or postponed the medical care they needed because of the cost (38%). vs.
Adults 65 and older, most of whom are eligible for health care coverage through Medicare, are much less likely than younger age groups to say they haven't received the health care they needed because of the cost. Three out of four uninsured adults (75%) say they haven't received the medical care they needed or have postponed it because of costs. Insured people are not immune to cost-related barriers to accessing care, and more than one in three insured adults (37%) report not receiving the medical care they needed because of the cost. Even though the vast majority of the U.S.
population has health insurance, medical debt is not uncommon. Different ways of measuring medical debt result in different prevalence estimates, but regardless of the method, there is a consensus that medical debt is a persistent and pervasive problem in the United States, even for people with insurance. One way to analyze medical debt is to submit credit reports, but medical debt is often disguised as other forms of debt when people pay medical bills with their credit cards or choose to pay them off while falling behind on other payments. Another way to measure medical debt is through surveys, which allow respondents to describe their debt in more detail or nuance. Questions about medical debt and other financial issues can be difficult to compare across surveys.
For example, it's not always clear if respondents respond about their personal experiences or about their family or home in general. Surveys may also differ in how they define medical debt or describe what forms of debt to include. In the KFF health debt survey, respondents were asked to think about the money they currently owed for their own medical or dental care or that of another person, such as a family member or dependent. The KFF health debt survey reveals that 41% of adults currently have some type of debt caused by their own medical or dental bills or those of a family member.
The Income and Program Participation Survey (SIPP) asks if money was owed for a medical bill and wasn't paid in full over the past year for each person in the household in the sample. Therefore, the SIPP results can be analyzed on an individual level or for a general household. This survey shows that approximately 1 in 12 adults has medical debt for the health care they have received or that of their family in the past year. The National Financial Capability Survey (NFCS) is a triennial survey sponsored by the FINRA Foundation that provides information on the financial security, experiences and vulnerabilities of individuals and homes.
The pandemic has had direct and indirect effects on the health system that can hinder projections. COVID-19 has generated new costs for vaccination, testing and treatment, and has also caused other changes in health utilization and spending. Some people avoided going to medical facilities for fear of contracting COVID and therefore skipped routine care or cancer screening early in the pandemic or delaying them, for example, which could lead to cumulative demand, worsening health conditions or more complex treatment for the disease in the future. The increase in the use of telemedicine could also change spending patterns in the future.
In addition, recent generalized inflation trends in the economy and employment trends in the health sector also increase the uncertainty of these projections. Join our email list to receive regular updates based on your personal preferences. CMS is the federal agency that provides health coverage to more than 160 million people through Medicare, Medicaid, the Children's Health Insurance Program and the Health Insurance Marketplace. CMS work in partnership with the entire healthcare community to improve quality, equity, and outcomes in the health care system. Private insurers have introduced several demand-side levers to control costs, including tiered pricing for providers and increased patient cost-sharing (for example, through the recent proliferation of high-deductible health plans).
Other levers include price negotiation, selective supplier contracting, risk-sharing payments, and utilization controls. Set provider rates for Medicare and the Veterans Health Administration, capitalizing on payments to Medicaid and Medicare managed care organizations. National health expenditures represent the amount spent on health care and related activities, such as public and private health insurance, medical research, and public health activities (. Personal health care expenditures, which account for the majority of total national health expenditures, are outlays on goods and services directly related to patient care, such as hospital care, doctors' and dentists' services, prescription drugs, eyeglasses, and care in nursing homes.
Cost control in markets is ensured through intense price competition between suppliers of goods and services to meet consumer demand. In recent years, coordinated care arrangements have become increasingly popular as a way to control costs in both the public and private sectors. The competitive strategy is based on its criticism of the current system of financing and service provision, according to which the provider has little incentive to contain costs, as long as an external paying insurer pays any submitted bill. Medicare reimbursement to hospitals currently covers 87 percent of hospital costs, while private health insurance reimburses hospitals for 145 percent of costs. Rather, the question is whether Congress should drastically improve the current system of public and private coverage, expanding Americans' personal options and control, or whether Congress should, on the contrary, prohibit private and employment-based health coverage and initiate a total takeover of the American health system by the government.
The 1970s were characterized by the rapid expansion of health care costs and the development of strategies to contain them. In 1983, the federal government adopted a regulatory approach to Medicare hospital payments, moving from a retrospective cost-based system, in which the hospital pays its costs, to a fixed-price prospective payment system (PPS), to create incentives for hospitals to provide their services efficiently. Compared to government-sponsored national health insurance, employer-based proposals limit costs transferred to public budgets. POS networks start with an HMO and add a PPO component in an attempt to achieve cost containment and freedom of choice for suppliers.
The growth rate of hospital costs has fallen per capita compared to the national average. The most important regulatory reform and expansion of coverage in the health system since the enactment of Medicare and Medicaid in 1965. The health care system suffers from rapidly rising health costs, lack of universal access to insurance coverage, poor geographical distribution of providers, underutilization of primary and preventive care services, gaps in continuity of care, and a high rate of inadequate utilization of health services. Despite all these efforts, employers may find that offering a coordinated care product (PPO or HMO) as an option to the employee group may not reduce overall costs. If there is no private market, then, of course, the change in costs ultimately only affects the patients themselves; once again, mostly in the form of delays and refusals of care.
