FACTS ON POLICY: National Health-care Expenditures

February 20, 2007

United States health-care expenditures make up 16 percent of GDP.

• In 2005, the nation as a whole (government, private sector, consumers) spent $2 trillion, or approximately $6,697 per capita, on health-care expenditures, roughly 16 percent of GDP.

– Personal health-care expenditures—including spending for hospital care, physician services, dental, and other types of medical  care—made up 83 percent of total national health-care expenditures.        

– Hospital care is the largest component of national health-care expenditures, accounting for one-third of total spending.

– Spending on administration, research, government public health activities, and facilities accounted for 17 percent.

• Between 1980 and 2005, heath-care expenditures increased more than eight times, from $246 billion to $2 trillion.

• In contrast, in 2004, the OECD nations’ mean health-care expenditures were 8.9 percent of GDP.

• In 1980, national health-care expenditures made up 9.1 percent of GDP, a proportion roughly commensurate with that of other OECD nations.  By the 1990s, however, the had surpassed other nations in the proportion of GDP spent on health care.    

• A small population bears a disproportionately high share of health-care expenses.  About 5 percent of health-care spenders account for almost half the health-care spending.  

Figure 1
National Health Expenditures-Aggregate and Annual Percent Change

Sources:

• U.S. Department of Health and Human Services, Center for Medicare and Medicaid Services, historical national health expenditure data.

• U.S. Department of Health and Human Services, Center for Medicare and Medicaid Services, national health expenditure highlights.

• U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality, medical expenditure panel surveys.

• Organisation for Economic Cooperation and Development, OECD Health Data 2006 (October 2006).

Quiz Source Information:

• U.S. Department of Labor, Bureau of Labor Statistics, “Consumer Expenditures in 2004” (April 2006).