The Unindicted Conspirator: High Healthcare Spending and the Rise of Third-Party Payment

37 Pages Posted: 12 Jul 2018

See all articles by John Graham

John Graham

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Date Written: 03/27/2017

Abstract

Healthcare spending in the United States is dominated by government and insurers, which are collectively called “third-party payers.” In 1960, patients controlled how almost 50 cents of each dollar spent on health care was paid. That number is now down to just over 10 cents, with the rest controlled by third-party payers. This separation of payer from consumer is associated with a significant increase in real healthcare spending per capita, with poor quality, and with waste that amounts to about one-third of healthcare spending. However, this result is not a natural economic outcome. Rather, it is the consequence of public policy that can, and should, be amended or reversed.

Suggested Citation

Graham, John, The Unindicted Conspirator: High Healthcare Spending and the Rise of Third-Party Payment (03/27/2017). MERCATUS RESEARCH, Available at SSRN: https://ssrn.com/abstract=3211648 or http://dx.doi.org/10.2139/ssrn.3211648

John Graham (Contact Author)

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

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