The Sustainability of Health Spending Growth
We evaluate the long–run sustainability of health spending growth. Under the criterion that non–health consumption does not fall, 1 percent excess cost growth appears to be an upper bound for the economy as a whole when the projection horizon extends over the century, although some groups would experience declines in non–health consumption. More generally, the increase in health spending as a share of income may lead to a significant expansion of public sector financing, as has been the case historically. Extrapolation of historical trends also suggests that higher health spending will lead to insurance contracts with lower out–of–pocket payment shares, putting further upward pressure on health care expenditures.
Volume (Year): 58 (2005)
Issue (Month): 3 (September)
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- Charles I. Jones, 2002. "Why Have Health Expenditures as a Share fo GDP Risen So Much?," NBER Working Papers 9325, National Bureau of Economic Research, Inc.
- Jagadeesh Gokhale & Kent Smetters, 2003. "Fiscal and generational imbalances: new budget measures for new budget priorities," Policy Discussion Papers, Federal Reserve Bank of Cleveland, issue Dec.
- Robert E. Hall & Charles I. Jones, 2005.
"The value of life and the rise in health spending,"
Federal Reserve Bank of San Francisco.
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