10 Ways to Visualize How Americans Spend Money on Health Care

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What's getting expensive the fastest? According to the Bureau of Labor Statistics, which includes detailed inflation data on hundreds of categories of goods and services, no price index is rising faster than hospital services.

But you don't need the BLS to tell you that health care is getting expensive. Employers know it, because they're paying the rising premiums. Workers know it, because those premiums are eating into our paychecks. Washington wonks know it, because Medicare is on pace to gobble up the entire budget later this century. The United States spends about $2.5 trillion -- one in every five or six dollars of GDP -- on health care. Here are ten graphs explaining where all that money is coming from, where it's going, and how it matches up against other countries.

1) U.S. AGAINST THE WORLD: SPENDING VS. LIFE EXPECTANCY
We spend much, much more per person than the rest of the world ... but we don't live much longer than some eastern European countries that spend much less than us. As a result, when you plot the United States against similarly advanced countries based on life expectancy and medical spending, we're all alone on our little island.

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2) U.S. AGAINST THE WORLD: GROWTH IN SPENDING SINCE 1980
Other advanced countries are seeing incredible medical inflation on a per capita basis ... but nobody's 30-year inflation rate quite matches the United States'. Norway and Switzerland come the closest.


3) HOW A MEDICAL DOLLAR GETS SPENT ACCORDING TO BLUE SHIELD
"Most of the dollar goes to medical care, not insurer profits," Sarah Kliff writes.


4) HOW THE $2.3 TRILLION GETS SPENT
The BLS finds that hospital costs are rising more than twice as fast as wages ... but those only make up about a third of total health expenditures. Slowing the growth of health care spending would require squeezing many of these slices of the pie at the same time by, for example, increasing the payoff of investments, making hospitals more efficient, reducing doctor pay, and making prescription drugs less expensive.

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5) WHO SPENDS ALL THAT MONEY? PART I
The top 5% of spenders account for almost half of all health care spending.

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6) WHO SPENDS ALL THAT MONEY? PART II
The top 1% spends $90,000 per person on health care .... 381 times more than the bottom 50%. These are the kind of statistics that lead some wonks to write that medical spending can't be subjected to free market principles like other products, because demand for it is uniquely unexpected and inelastic.
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7) WHO SPENDS ALL THAT MONEY? THE ELDERLY
 
An important double-barreled stat: The top 1% of health care spenders make up 20% of all health care spending ... and 2/3rds of them are older than 55.

health care 4.png

8) WHO SPENDS ALL THAT MONEY? THE SICK
The 1% of health care spenders are much, much sicker than the rest of the country ... but, somewhat surprisingly, almost half of them are in good, very good, or excellent health.

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9) THE LIFE-SAVING POWER OF MEDICAL INNOVATION
You can't talk about rising costs without talking about better medical technology. Thanks to incredible advances in heart surgery and medicine, the cardiovascular related deaths per capita have declined by 80 percent since 1950.

health care 6.png10) THE LONG-TERM MEDICARE/MEDICAID CRISIS
The graph every budget wonk has tattooed to the inside of his/her eyeballs. Our long-term budget crisis is nearly entirely a crisis of government health care spending, which is overwhelmingly in Medicare and Medicaid.

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Sources: OECD; Blue Shield; NIHCM; CBO

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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