Sustainable Health Spending and the U.S. Federal Budget


Health spending has grown faster than the economy fordecades, resulting in growth of the health care share of national economic output (gross domestic product [GDP]) from about 7 percent in 1970 to about 18 percent today. This inexorable increase in healthcare spending is a problem for individuals, families, businesses, government, and the overall economic health of the country. This is particularly evident when viewing federal, state, and localgovernment budgets. About half of health care spending is publicly financed, mostly through Medicare and Medicaid; and the current rate of growth for these programs is not sustainable, as it crowds out other priorities, such as infrastructure needs and education. A sustainable solution requires a long-term reduction in the health spending growth rate relative to GDP or “bending the health care cost curve.

This monograph is the result of a meeting held in Washington, D.C., on July 24, 2012. The goal of the symposium was to illuminate the issues around sustainable health spending by exploring perspectives on such spending, with explicit connection to the federal fiscal situation.