Assessing US health expenditure and its increases, 1996-2012

In 2013 the United States spent $2.9 trillion on health care, more than any previous year. To gain insight into these expenses and what is driving this growth, we divide health expenditure into 300 disease and injury categories, the setting of care, and age and sex groups. We explore the increases in health expenditure from 1996 to 2012 by assessing changes in demography, epidemiology, utilization, and prices.

We use a diverse set of survey and administrative data to divide US health expenditure into granular demographic and epidemiologic groups. We adjust our estimates for comorbidity and estimate confidence intervals. We combine our disaggregated expenditure estimates with population and disease prevalence estimates from the Global Burden of Disease 2013 study. Finally, we conduct a multivariate Shapely decomposition to quantify the causes of increases in health expenditure.

Preliminary results indicate that the primary driver of increases in total health expenditure is changes in utilization, with patients seeking care more often per illness. Increases in spending are also driven by increasing prices. Growing and aging of the population and changing epidemiological profile also contributed to increases, but less than changes in utilization and prices.

Understanding the disease and population groups responsible for the majority of health spending and its increases can provide necessary evidence for policymakers contain the growing cost of health care in the US and reallocate resources to groups most in need.