September 9th, 2009
If the growth rate in U.S. health care spending continues at current levels, a vastly greater share of personal income and economic resources will be devoted to health care, according to a new analysis in the September/October issue of Health Affairs. And even if that growth rate could be slowed sharply — to a pace of just 1 percentage point faster than annual per capita growth in the gross domestic product — more than half of any increase in personal income would still go to health care over the next 75 years.
The new Sept-Oct Health Affairs issue is a thematic volume on bending the curve of rising health spending. The issue will be discussed at a Washington D.C. briefing at 8:30 am ET on Wednesday Sept. 9. A live Webcast of the briefing and an archived version will be available, and you can also follow the briefing through live tweets from Health Affairs Senior Editor Larry Wheeler at #HACostCurve.
In an update of work published in 2003, Harvard researchers Michael Chernew and David Cutler, along with the University of Michigan’s Richard Hirth, project health spending in relation to economic growth over the period 2007 to 2083. They find that if health spending grows about two percentage points faster than real per capita GDP, a staggering 119 percent of the real increase in per capita income would be devoted to health spending. This means, in effect, that the entire net increase in income over the period would go to consumption of health care resources, as well as a portion of what currently goes to other goods and services.
On the other hand, if the nation were to accomplish a Herculean feat — slowing the growth of health spending to just one percentage point faster than real per capita GDP — 53.6 percent of real income growth would go to health care. That’s “affordable,” the authors argue — although such an outcome would still pose critical challenges for the United States.Email This Post Print This Post