Health Care Spending: Historical Trends and New Directions
Over the last five decades, broad changes in the US health care system have dramatically influenced growth in health care expenditures. These structural changes have also influenced the trajectory of the health economics research. This paper reviews some of the seminal health economics papers (measured by citations) and identifies the salient factors driving the growth of medical expenditures. We find that the research identified – and was strongly influenced by – four eras of expenditure growth: (1) coverage expansion; (2) experimentation with financial incentives; (3) the managed care backlash; and (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.
Research reported here was supported by the National Institute on Aging of the National Institutes of Health under award number P01AG033559. The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health or the National Bureau of Economic Research.
Dana Goldman is a founder of Precision Health Economics, a consultancy providing expertise to the life sciences industry.
Alice Chen & Dana Goldman, 2016. "Health Care Spending: Historical Trends and New Directions," Annual Review of Economics, vol 8(1). citation courtesy of