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

Connect

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

Learn More »

More From New Marketplace
Three-Part Pricing of PCSK9 Inhibitors

A New Model for Pricing Drugs of Uncertain Efficacy

Are we paying too much for new drugs before we know how well they work? This innovative pricing model proposes postponing major rewards until efficacy is established — which could help both patients and payers while still paying back investments on the most effective drugs.

what does quality measurement in health care mean

Buzz Survey Report: Addressing the Problems of Quality Measurement

An independent NEJM Catalyst report sponsored by University of Utah Health on patient involvement in quality measurement.

Average HOOS and Average KOOS for patients undergoing hip and knee replacement at CJRI

Building a “Hospital-within-Hospital” Model for Joint Replacements

The Connecticut Joint Replacement Institute has demonstrated that formerly competing independent providers can unite on a common vision to yield drastic improvements in quality, safety, and costs.

Discharge Rates and Follow-Up Internval Dashboard for One Provider at MGH Dermatology

A Successful Pilot to Improve Access by Adjusting Discharge and Follow-Up Rates

Actionable data and modest financial incentives can help motivate clinicians to adjust their behavior around scheduling follow-up appointments.

Cautious Optimism That Value-Based Reimbursement Will Become Primary Revenue Model

Survey Snapshot: What Would Accelerate the Adoption of Value-Based Care?

NEJM Catalyst Insights Council members weigh in on the barriers and path forward to value-based health care.

Strongwater08_pullquote primary care value proposition and disruptive innovation

The Evolution of Primary Care: Embracing Innovation While Protecting the Core Value

Primary care must leverage disruptive innovations to ensure that patients receive first-access, comprehensive, coordinated, continuous care that is woven into a seamlessly integrated system.

Berns01_pullquote nephrologists dialysis facility joint venture conflicts of interest

Dialysis-Facility Joint-Venture Ownership — Hidden Conflicts of Interest

Despite potential benefits, joint ventures between nephrologists and dialysis companies raise legal and ethical concerns because of participants’ conflicts of interest and lack of transparency.

Fee-for-Service Continues to Account for the Majority of Revenue

New Marketplace Survey: Transitioning Payment Models: Fee-for-Service to Value-Based Care

In a survey of the NEJM Catalyst Insights Council sponsored by Optum, respondents express enthusiasm for value-based care but have conflicting opinions about just how far along that path they should go.

Sample Report Comparing Individual Patient-Reported Outcome Measures with FORCE-TJR National Norms

The Essential Role of Patient-Centered Registries in an Era of Electronic Health Records

Smartly designed patient-centered registries capture longitudinal data to augment EHRs and enhance quality improvement, policy, and research efforts.

Murray02_pullquote surgical care bundled payments accountable care organizations

Surgical Value — Beyond Bundled Payments

The surgeon has a crucial role in defining value for patients in a population — and not just when that patient is in need of the surgeon’s knife.

Connect

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

Learn More »

Topics

Value Based Care

194 Articles

A New Model for Pricing Drugs…

Are we paying too much for new drugs before we know how well they work?…

Prescription for an Ailing U.S. Health…

Three components for treating the unhealthy, uncompetitive U.S. health care market — beginning with a…

Prescription for an Ailing U.S. Health…

Three components for treating the unhealthy, uncompetitive U.S. health care market — beginning with a…

Insights Council

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

Apply Now