Factors associated with increases in US health care spending, 1996–2013

IMPORTANCE

Health care spending in the United States increased substantially from 1995 to 2015 and comprised 17.8% of the economy in 2015. Understanding the relationship between known factors and spending increases over time could inform policy efforts to contain future spending growth.

OBJECTIVE 

To quantify changes in spending associated with five fundamental factors related to health care spending in the United States: population size, population age structure, disease prevalence or incidence, service utilization, and service price and intensity.

MAIN OUTCOMES AND MEASURES 

Change in health care spending from 1996 through 2013.

RESULTS 

After adjustments for price inflation, annual health care spending on inpatient, ambulatory, retail pharmaceutical, nursing facility, emergency department, and dental care increased by $933.5 billion between 1996 and 2013, from $1.2 trillion to $2.1 trillion. Increases in US population size were associated with a 23.1% (uncertainty interval [UI], 23.1%–23.1%), or $269.5 (UI, $269.0–$270.0) billion, spending increase; aging of the population was associated with an 11.6% (UI, 11.4%–11.8%), or $135.7 (UI, $133.3–$137.7) billion, spending increase. Changes in disease prevalence or incidence were associated with spending reductions of 2.4% (UI, 0.9%–3.8%), or $28.2 (UI, $10.5–$44.4) billion, whereas changes in service utilization were not associated with a statistically significant change in spending. Changes in service price and intensity were associated with a 50.0% (UI, 45.0%–55.0%), or $583.5 (UI, $525.2–$641.4) billion, spending increase. The influence of these five factors varied by health condition and type of care. For example, the increase in annual diabetes spending between 1996 and 2013 was $64.4 (UI, $57.9–$70.6) billion; $44.4 (UI, $38.7–$49.6) billion of this increase was pharmaceutical spending.

CONCLUSIONS AND RELEVANCE 

Increases in US health care spending from 1996 through 2013 were largely related to increases in health care service price and intensity but were also positively associated with population growth and aging and negatively associated with disease prevalence or incidence. Understanding these factors and their variability across health conditions and types of care may inform policy efforts to contain health care spending.