Rising Healthcare Costs

For 31 of the past 40 years, healthcare costs have increased at a greater rate than the economy as a whole. 1  In 2016, healthcare costs represented 18% of our nation’s GDP – a staggering $3.3 trillion up from $2.6 trillion in 2010. And, that figure is expected to balloon to $5.4 trillion by 2024, when nearly $1 out of every $5 spent in this country will be on healthcare 2.

Healthcare costs are only projected to continue their upward trajectory, driven largely by rising prices for prescription drugs and medical services, provider consolidation, patients being directed to receive care in inappropriate, higher cost settings, and fraud, waste, and abuse.  For example:

  • Spending on pharmaceuticals per person was 30 to 190 percent higher in the U.S. than in nine other high-income countries 3
  • Consolidation between physicians and hospitals have led to increased spending for outpatient care driven almost entirely by price increases 4
  • 30 percent of healthcare spending ($750 billion) each year is wasted 5
  • On average, providers that don’t make price information readily available to consumers charge 51 percent more than those that do 6


  1. http://www.nationalacademies.org/hmd/~/media/Files/Activity%20Files/Quality/LearningHealthCare/Release%20Slides.pdf
  2. https://www.cnbc.com/2015/07/28/1-of-every-5-spent-in-us-will-be-on-health-care.html
  3. http://www.commonwealthfund.org/publications/issue-briefs/2017/oct/prescription-drug-costs-us-outlier
  4. https://www.ahip.org/provider-consolidation-and-its-effect-on-spending-and-prices
  5. http://meritagemed.com/surprising-facts-united-states-health-care
  6. https://www.publicagenda.org/blogs/lack-of-price-transparency-in-health-care-may-drive-rising-costs