New Marketplace

My Favorite Slide: Understanding the Growth of Health Care Spending

Infographic · January 30, 2018

Changes in household spending 1984-2014 health care spending

  Click To Enlarge.

This is one of my favorite slides because it shows to what extent health care costs have had an impact on the everyday life of Americans over the course of a generation. During the three decades from 1984 to 2014, many societal, economic, and environmental changes have occurred. After all, in 1984, we didn’t have the worldwide web, smartphones, or any of the benefits that the Internet has brought us. But we did have relatively inexpensive restaurants, clothing, and higher education. We also had significantly lower costs of care, and health spending was “only” 10% of the GDP.

Fast forward to 2014: health care consumes 8% of household spending — up 67% from less than 5%. At the same time, company-sponsored pensions disappeared, forcing households to save more for retirement and pushing money into 401(k) plans. That spending grew 24%, raising the household spend in that category to 10.7%, up from 8.6%. Of course, that came at the expense of other spending because, when all is said and done, something’s gotta give. It’s easy to guess what comes first for most: housing, transportation, food, personal insurance/pensions, and health care, in that order. But while the 3.2 point increase over 30 years may seem modest, the 67% growth rate of health care spending exceeds all other categories.

We often forget the wise statement from the late Uwe Reinhardt that households pay the entire health care bill of the United States, but this chart reminds us of that and its effect on the rest of the economy.

New call for submissions ­to NEJM Catalyst

Now inviting longform articles


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »

More From New Marketplace
Dale04_pullquote_disrupting the value-based vs fee-for-service payment model

Disrupting the Payment Model

We should modernize our payment mechanisms to reflect the reality of our digitally enabled lives.

Percentage of Patients Choosing a Reference-Based Pricing Facility for Knee or Hip Replacement Surgery - 2008-2012 - value-based benefit designs

The Evidence for High-Value Benefit Designs

Innovative models are showing promise, but limited transparency and peer-reviewed research hamper expansion.

New Evidence on Stemming Low-Value and Overprescribing - Nudgind Physicians Toward Better Prescribing Practices

New Evidence on Stemming Low-Value Prescribing

New research suggests that deploying strong and surprising messages could help to address overprescribing of opioids and other drugs.

Wang01_pullquote medical devices - medical device innovation in China

Accelerating Medical Device Innovation in China

Promoting collaboration between clinicians, researchers, device-makers, and regulators.

Health Care Costs - Cost Transparency Is the Main Change Needed to Support Patients in Lowering the Cost of Care

Survey Snapshot: Is Transparency the Answer to Rising Health Care Costs?

NEJM Catalyst Insights Council members say that while transparency might be necessary, we have to change the way care is delivered.

Many Stakeholders Share Responsibility for Lowering the Cost of Care

New Marketplace Survey: Patients Lack Information to Reduce the Cost of Care

Efforts to mitigate rising health care costs have left most industry participants — patients, providers, and payers alike — frustrated at the lack of progress. While there is plenty of blame to go around, a significant open question remains: how responsible are patients for reducing costs?

Hip or Knee OA Care Management - Musculoskeletal Institute and Bundled Payment Program at Dell Medical

Bundled Payments Are Moving Upstream

Dell Medical School at The University of Texas at Austin has improved outcomes and reduced costs for musculoskeletal care with a multidisciplinary Musculoskeletal Institute and bundled payment model.

Elements of a Sustainable Complex Care Management Contract

Sustainable Financing for Complex Care Management Is Critical to a Value-Driven Health Care System

Care management should be payer-agnostic at its core.

Comparison of Certain Model Features in Blue Cross NC Blue Premier vs Next-Generation ACO Model vs BCBSMA Alternative Quality Contract

Engineering a Rapid Shift to Value-Based Payment in North Carolina: Goals and Challenges for a Commercial ACO Program

We believe North Carolina can be a model for the nation.

Small Molecule Drugs Facing Generic Competition - Orphan and Non-Orphan Drugs - Orphan Drug Act

It’s Time to Reform the Orphan Drug Act

Three proposals for improving the law to reflect 21st-century drug development practices.


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »


Vertical Integration and Bold Experimentation

Four points on improving value in health care via vertical integration and aggressive experimentation.

Value Based Care

203 Articles

Disrupting the Payment Model

We should modernize our payment mechanisms to reflect the reality of our digitally enabled lives.

Medicare and Medicaid

124 Articles

“You’re Old Without Hearing Aids”— Addressing…

Hearing loss isn’t a normal consequence of aging. But it is associated with a higher…

Insights Council

Have a voice. Join other health care leaders effecting change, shaping tomorrow.

Apply Now