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Health Care Spending: Historical Trends and New Directions

Author

Listed:
  • Alice Chen

    (Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles, California 90089)

  • Dana Goldman

    (Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles, California 90089)

Abstract

Over the past five decades, broad changes in the US health care system have dramatically influenced growth in health care expenditures. This review identifies the salient factors driving the growth of medical expenditures and how they influenced the trajectory of health economics research. We find that the research identified—and was strongly influenced by—four eras of expenditure growth: period 1, coverage expansion; period 2, experimentation with financial incentives; period 3, the managed care backlash; and period 4, a golden era of declining expenditure growth. We conclude by discussing some themes from this research suggesting optimism that, going forward, we can curb excess expenditure growth above GDP growth without harming population health.

Suggested Citation

  • Alice Chen & Dana Goldman, 2016. "Health Care Spending: Historical Trends and New Directions," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 291-319, October.
    • Handle: RePEc:anr:reveco:v:8:y:2016:p:291-319
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    File URL: http://www.annualreviews.org/doi/10.1146/annurev-economics-080315-015317
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    References listed on IDEAS

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    Cited by:

    1. Mark Elder & Magnus Bengtsson & Lewis Akenji, 2016. "An Optimistic Analysis of the Means of Implementation for Sustainable Development Goals: Thinking about Goals as Means," Sustainability, MDPI, vol. 8(9), pages 1-24, September.
    2. Joelle H Fong, 2019. "Out-of-pocket health spending among Medicare beneficiaries: Which chronic diseases are most costly?," PLOS ONE, Public Library of Science, vol. 14(9), pages 1-16, September.
    3. Maryaline Catillon & David Cutler & Thomas Getzen, 2018. "Two Hundred Years of Health and Medical Care: The Importance of Medical Care for Life Expectancy Gains," NBER Working Papers 25330, National Bureau of Economic Research, Inc.
    4. Eunhae Shin, 2019. "Hospital responses to price shocks under the prospective payment system," Health Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 245-260, February.
    5. Richard Z. Xie & Erica deFur Malik & Mark T. Linthicum & Jennifer L. Bright, 2021. "Putting Stakeholder Engagement at the Center of Health Economic Modeling for Health Technology Assessment in the United States," PharmacoEconomics, Springer, vol. 39(6), pages 631-638, June.

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    More about this item

    Keywords

    health insurance; technology; medical expenditures; managed care;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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