ECONOMIC REPORT OF THE PRESIDENT

Figure 4-22
Health Care Spending as a Share of GDP, 1960–2015
Percent of GDP
21
18
2015
15
12
9
6
3
0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Source: National Health Expenditure Accounts; National Income and Product Accounts;
CEA calculations.
as illustrated in Figure 4-23. In 2009, the share of GDP that the United
States devoted to health care was more than 80 percent higher than that of
the median member of the Organisation for Economic Co-operation and
Development (OECD) and nearly 50 percent higher than that of the next
highest OECD member. Due in part to challenges in obtaining comparable
data for the United States and other OECD countries, the reasons that
spending was so much higher in the United States are not fully understood.
However, research has generally concluded that the United States paid
higher prices for health care services—potentially reflecting the greater market
power held by providers and insurers in the United States’ system—and
made greater use of costly, but not necessarily effective, medical technologies
and treatments (Anderson et al. 2003; Garber and Skinner 2008).16
The United States’ much-higher spending could have been justified if
the additional spending translated into better health care outcomes. In fact,
life expectancy was almost two years shorter in the United States than in the
median OECD country, and cross-county comparisons of various measures
of the quality of care, such as the risk of hospital-acquired infections, found
that the outcomes achieved in the United States were, at best, unremarkable
16 These two drivers of higher health care spending in the United States may, to some degree,
be related if providers’ ability to charge higher prices facilitates investment in costly medical
technologies.
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