Health Care Spending: Historical Trends and New Directions

38 Pages Posted: 31 Aug 2015

See all articles by Alice Chen

Alice Chen

University of Southern California - Schaeffer Center for Health Policy and Economics

Dana P. Goldman

RAND Corporation; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: August 2015

Abstract

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.

Suggested Citation

Chen, Alice and Goldman, Dana P., Health Care Spending: Historical Trends and New Directions (August 2015). NBER Working Paper No. w21501. Available at SSRN: https://ssrn.com/abstract=2653512

Alice Chen (Contact Author)

University of Southern California - Schaeffer Center for Health Policy and Economics ( email )

635 Downey Way
Los Angeles, CA 90089-3333
United States

Dana P. Goldman

RAND Corporation ( email )

P.O. Box 2138
Santa Monica, CA 90407-2138
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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