Total health care spending reached 17.4 percent of gross domestic product (GDP) in 2013, and that share is expected to continue to grow significantly, according to the Centers for Medicare and Medicaid Services. Given this trend, it is critical to develop an understanding of what those increased expenditures represent. Are the increases attributable to rising costs of treatment or more individuals receiving medical care? What medical conditions account for the majority of spending? Which medical conditions see the cost of treatment rising most rapidly? Do these spending increases coincide with improvements in treatment? Answers to these questions are necessary in order to formulate policies that allow for society’s efficient consumption of health care as well as for the improvement of the nation’s overall health status.
The Bureau of Economic Analysis (BEA) has been conducting research to develop a health care satellite account (HCSA)—engaging in methodological research, evaluating new data sources, collaborating with academic researchers, and working jointly across multiple federal agencies (see the SURVEY OF CURRENT BUSINESS articles (2007),(2008),(2009),(2012),(2013)). The account builds on research by prominent health economists, recommendations from two reports of the National Academy of Sciences’ Committee on National Statistics, and years of research both at BEA and the Bureau of Labor Statistics (BLS).
This first release of the HCSA presents preliminary estimates that may be used to improve our understanding of health care spending trends and its effects on the U.S. economy.