The sustainability of health spending growth

Glenn Follette and Louise Sheiner

No 2005-60, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We evaluate the long-run sustainability of health spending growth. Under the criterion that non-health consumption does not fall, one percent excess cost growth appears to be an upper bound for the economy as a whole when the projection horizon extends over the century, although some groups would experience declines in non-health consumption. More generally, the increase in health spending as a share of income may lead to a significant expansion of public sector financing, as has been the case historically. Extrapolation of historical trends also suggests that higher health spending will lead to insurance contracts with lower out-of-pocket payment shares, putting further upward pressure on health care expenditures.

Keywords: Medicare; Public health - Economic aspects (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-hea
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: The Sustainability of Health Spending Growth (2005)
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