Posted: 18 Nov 2016
Date Written: October 2016
Over the past five decades, broad changes in the US health care system have dramatically influenced growth in health care expenditures. This review identifies the salient factors driving the growth of medical expenditures and how they influenced the trajectory of health economics research. We find that the research identified — and was strongly influenced by — four eras of expenditure growth: period 1, coverage expansion; period 2, experimentation with financial incentives; period 3, the managed care backlash; and period 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: Suggested Citation
Chen, Alice and Goldman, Dana, Health Care Spending: Historical Trends and New Directions (October 2016). Annual Review of Economics, Vol. 8, pp. 291-319, 2016. Available at SSRN: https://ssrn.com/abstract=2870849 or http://dx.doi.org/10.1146/annurev-economics-080315-015317