Decomposing growth in spending finds annual cost of treatment contributed most to spending growth, 1980-2006.
Researchers have disagreed about factors driving up health care spending since the 1980s. One camp, led by Kenneth Thorpe, identifies rising numbers of people being treated for chronic diseases as a major factor. Charles Roehrig and David Rousseau reach the opposite conclusion: that three-quarters of growth in average spending reflects the rising costs of treating given diseases. We reexamined sources of spending growth using data from four nationally representative surveys. We found that rising costs of treatment accounted for 70 percent of growth in real average health care spending from 1980 to 2006. The contribution of shares of the population treated for given diseases increased in 1997-2006, but even then it accounted for only one-third of spending growth. We highlight the fact that Thorpe's inclusion of population growth as part of disease prevalence explains the appreciable difference in results. An important policy implication is that programs to better manage chronic diseases may only modestly reduce average spending growth.
['Starr|Martha|M|', 'Dominiak|Laura|L|', 'Aizcorbe|Ana|A|']
D000293:Adolescent D000328:Adult D000368:Aged D002908:Chronic Disease D017281:Cost of Illness D005260:Female D017048:Health Care Costs D005102:Health Expenditures D006801:Humans D008297:Male D008875:Middle Aged D011158:Population Growth D014481:United States D055815:Young Adult
Cost of Health Care Financing Health Care Health Economics Health Spending Medical technology