Introduction to Health
Economics
Per Capita Total Current Health Care Expenditures,
U.S. and Selected Countries, 2007
Australia
$3,172
Austria
$3,581
Belgium^
$3,462
Canada
$3,715
Denmark
$3,362
Finland
$2,677
France
$3,496
Germany
$3,463
Greece
$2,626
Iceland*
$3,319
Ireland
$3,295
Italy
$2,569
Netherlands^
$3,527
Norway
$4,463
Spain
$2,578
Sweden
$3,180
Switzerland^
$4,417
United Kingdom
$2,851
$6,956
United States
^OECD estimate.
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
*Differences in methodology.
Notes: Amounts in U.S.$ Purchasing Power Parity, see www.oecd.org/std/ppp; includes only countries over $2,500. OECD defines Total Current
Expenditures on Health as the sum of expenditures on personal health care, preventive and public health services, and health administration and
health insurance; it excludes investment.
Source: Organisation for Economic Co-operation and Development. OECD Health Data 2009, from the SourceOECD Internet subscription database
updated November 2009. Copyright OECD 2009, http://www.oecd.org/health/healthdata. Data accessed on 11/13/2009.
National Health Expenditures per Capita and Their
Share of Gross Domestic Product, 1960-2008
$9,000
$8,000
$7,000
$6,000
$5,000
$4,295
$4,522
$4,789
$5,150
$5,564
$5,973
$6,327
$6,701
$7,071
$7,423
$7,681
$4,000
$2,814
$3,000
$2,000
$1,000
$1,100
$148
$356
$0
1960
1970
1980
1990
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
NHE as a Share of GDP
5.2% 7.2%
9.1% 12.3% 13.5% 13.5% 13.6% 14.3% 15.1% 15.6% 15.6% 15.7% 15.8% 15.9% 16.2%
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at
http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2008; file
nhegdp08.zip).
National Health Expenditures per Capita,
1990-2018
$14,000
Actual
$13,100
(2018)
Projected
$12,000
$8,160
(2009)
$10,000
$8,000
$6,000
$2,814
$4,000 (1990)
Per Capita
$2,000
Projected Per Capita
18
17
20
16
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at
http://www.cms.hhs.gov/NationalHealthExpendData/ (Historical data from NHE summary including share of GDP, CY 1960-2007, file
nhegdp07.zip; Projected data from NHE Projections 2008-2018, Forecast summary and selected tables, file proj2008.pdf).
20
15
20
14
20
13
20
12
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
20
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
19
19
90
$0
Cumulative Changes in Health Insurance Premiums,
Inflation, and Workers’ Earnings, 1999-2009
140%
131%
120%
100%
80%
60%
38%
40%
20%
28%
0%
1999
2000
2001
2002
2003
2004
Note: Due to a change in methods, the cumulative changes in the average family
premium are somewhat different from those reported in previous versions of the
Kaiser/HRET Survey of Employer-Sponsored Health Benefits. See the Survey Design
and Methods Section for more information, available at
http://www.kff.org/insurance/7936/index.cfm.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009.
Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation
(April to April), 1999-2009; Bureau of Labor Statistics, Seasonally Adjusted Data from
the Current Employment Statistics Survey, 1999-2009 (April to April).
2005
2006
2007
2008
2009
Health Insurance Premiums
Workers' Earnings
Overall Inflation
Federal Programs
• Medicare
– 100% federal pay
– run by the feds
– old people, disabled people under SSI
• Medicaid
–
–
–
–
1/3-1/2 cost share by the states - about 25% of LA budget
run by states
poor people, often old, nursing homes
falls apart when folks need it most
• Tricare and military health programs
– Getting to be big dollars, usually left off the graph
Distribution of Personal Health Care
Expenditures by Source of Payment, 1998 and
2008
1998
2008
Public 43.1% Private 56.9%
Other
Government
Programs
7.4%
Consumer
Out-of-Pocket
17.4%
Consumer
Out-of-Pocket
14.2%
Medicaid
16.2%
Medicaid
15.7%
Private Health
Insurance
34.1%
Medicare
20.0%
Other
Government
Programs
7.5%
Public 46.5% Private 53.5%
Other Private
5.5%
$1.2 Trillion
Medicare
22.8%
Private Health
Insurance
35.4%
Other Private
3.9%
$2.3 Trillion
Notes: Personal health care expenditures are spending for health care services, excluding administration and net cost of insurance, public health activity, research,
and structures and equipment. Out-of-pocket health insurance premiums paid by individuals are not included in Consumer Out-of-Pocket; they are counted as part
of Private Health Insurance. Medicaid spending for the State Children's Health Insurance Program (which began in 1998) is included in Other Government
Programs, not in Medicaid.
Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics
Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service and source of funds, CY 1960-2008;
file nhe2008.zip).
Medicare Spending as a Share of
Total Federal Outlays, FY2010
Defense
Discretionary
19%
Social Security
20%
Medicare
13%
Nondefense
Discretionary
19%
Net Interest
5%
Medicaid and
SCHIP
8%
Other
16%
2010 Total Outlays = $3.5 trillion
SOURCE: OMB, Fiscal Year 2010 Budget, February 2009. Budget Summary by Category.
Distribution of National Health Expenditures, by
Type of Service, 2008
Other Health
Spending
16.5%
Other Personal
Health Care
12.9%
Home Health
Care, 2.8%
Nursing Home
Care, 5.9%
Prescription
Drugs
10.0%
Hospital Care
30.7%
Physician/
Clinical
Services
21.2%
Note: Other Personal Health Care includes, for example, dental and other professional health services, durable medical equipment,
etc. Other Health Spending includes, for example, administration and net cost of private health insurance, public health activity,
research, and structures and equipment, etc.
Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the
Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health
Expenditures by type of service and source of funds, CY 1960-2008; file nhe2008.zip).
Percent of Total Health Care Spending
Concentration of Health Care Spending in
the U.S. Population, 2007
97.0%
100%
81.2%
80%
74.6%
65.2%
60%
49.5%
40%
22.9%
20%
3.0%
0%
Top 1%
Top 5%
Top 10%
Top 15%
Top 20%
Top 50%
(≥$44,482) (≥$15,806) (≥$8,716)
(≥$5,798)
(≥$4,064)
(≥$786)
Percent of Population, Ranked by Health Care Spending
Bottom
50%
(<$786)
Note: Dollar amounts in parentheses are the annual expenses per person in each percentile. Population is the civilian noninstitutionalized
population, including those without any health care spending. Health care spending is total payments from all sources (including direct
payments from individuals, private insurance, Medicare, Medicaid, and miscellaneous other sources) to hospitals, physicians, other providers
(including dental care), and pharmacies; health insurance premiums are not included.
Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for Healthcare
Research and Quality, Medical Expenditure Panel Survey (MEPS), 2007.
Distribution of Average Spending Per Person,
2006
Average Spending Per
Person
Age (in years)
<5
$1,508
5-17
1,267
18-24
1,441
25-44
2,305
45-64
4,863
>64
8,776
Sex
Male
$3,002
Female
3,886
Notes: Includes individuals without any spending in 2006.
Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for
Healthcare Research and Quality, Medical Expenditure Panel Survey (MEPS), 2006.
Putting Off Care Because of Cost
In the past 12 months, have you or another family member living in your household…
because of the COST, or not?
Percent saying “yes”
Relied on home remedies or over the
counter drugs instead of seeing a doctor
34%
Skipped dental care or checkups
34%
Put off or postponed getting health care you needed
30%
Not filled a prescription for a medicine
26%
22%
Skipped recommended medical test or treatment
Cut pills in half or skipped doses of medicine
Had problems getting mental health care
17%
6%
Did ANY of the above
Source: Kaiser Family Foundation Health Tracking Poll (conducted November 5-12, 2009)
53%