Keeping Score

Traditionally, medical care spending was regarded as fulfilling basic need. Numerous programs were devised during the past fifty years to increase the amount and level of services and none exceeds the influence of Medicare. The nation's health spending during 2007 increased 6.1percent to $2.2 trillion, or $7,421 per person, exceeding by far that of any other nation. Although the rate of increase was somewhat slower than previous years, the increase was faster than the overall economy. Health care consumed 16.2 percent of Gross Domestic Product (GDP), an increase from 16 percent in 2006. Federal, state and local governments paid for 46.2 percent of health care spending in 2007, an increase from 45.3 percent in 2004 and 37.6 percent in 1970.

According to the McKinsey Global Institute, health care spending in 2003 was $1.7 trillion and $477 billion was more than would be expected in comparison with thirteen peer countries comprising the Organization for Economic Co-operation and Development (OCED), even adjusting for wealth. Hospital and physician care accounted for nearly 85 percent of 2003 spending above the expected. In 2006, health care spending was $2.1 trillion and $650 billion was more than would be expected in comparison with OCED countries, adjusting for wealth. Outpatient care including that of hospitals was the largest and fastest growing segment accounting for $436 billion of the $650 billion. Drugs were $98 billion and administration was $91 billion.