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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

    as
    1. Weisbrod, Burton A, 1991. "The Health Care Quadrilemma: An Essay on Technological Change, Insurance, Quality of Care, and Cost Containment," Journal of Economic Literature, American Economic Association, vol. 29(2), pages 523-552, June.
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    Cited by:

    1. 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.
    2. 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, Open Access Journal, vol. 8(9), pages 1-24, September.

    More about this item

    Keywords

    health insurance; technology; medical expenditures; managed care;

    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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