Since publishing the seminal text Who Shall Live? Health, Economics, and Social Choice in 1974, Stanford’s Victor Fuchs, PhD, often has been cited on the economics of health care policy. Now, in a perspective piece published today in The New England Journal of Medicine, Fuchs provides a historical view of health care trends in the United States.
In the piece, the author explains the almost continuous increase in expenditures in the last six decades and comments on the challenges undermining cost-control efforts. And he provides a staggering figure that situates the health care problem as a major, long-term economic one:
In 1950, health expenditures accounted for only 4.6% of the gross domestic product (GDP). In 2009, they accounted for more than 17%, a larger share than all manufacturing, or wholesale and retail trade, or finance and insurance, or the combination of agriculture, mining, and construction.
Fuchs doesn’t expect that number to come down anytime soon:
It is difficult to see how the health sector can continue to expand rapidly at the expense of the rest of the economy, but every past prediction of a sustained slowing of the growth of health expenditures has been proved wrong. Rapid growth may continue as a result of political gridlock regarding the form that curbs on expenditures should take. There is no public consensus about how much care should be provided for the poor and sick or how it should be done. Similarly, there’s no public consensus regarding efforts to increase the efficiency of care.
Previously: Views on costs and reform from the “dean of American health care economists”, Health economist Victor Fuchs looks at Who Shall Live, Why is cost-effective care so difficult to achieve? and Victor Fuchs talks health-care costs and reform in Q&A