Trends in U.S. Health Care Spending Leading Up to Health Reform

A patient pays a receptionist at a doctors office.

A report funded by the Robert Wood Johnson Foundation, as part of its Affordable Care Act (ACA) Implementation—Monitoring and Tracking Series, finds that in the decade leading up to the ACA’s passage, per capita spending on personal health services among the nonelderly rose at an annual rate 3.5 percent faster than general consumer prices.

Prepared by researchers at The Urban Institute, the report analyzes the distribution of per capita spending across various health care service categories (e.g., hospital outpatient and physician, inpatient, prescription drugs, emergency room care), and breaks down the service type into changes in the number of individuals using the service; the average number of services used; and expenditures per unit of services.

Key Findings

  • Per capita health expenditures increased by 41 percent, predominantly due to increases in physician and outpatient hospital spending, followed by inpatient hospital spending.

  • Per capita prescription drug expenditures increased by over 50 percent.

  • Prevalence of chronic conditions appears to be an important driving force behind changes in spending.

  • Growth in costs slowed somewhat in the latter part of the decade.