Health Spending Represents 17.9% of GDP

The California Health Care Foundation recently released its 2012 report on health care costs.  The report illustrates how America pays for its health care, as well as how these costs have evolved over the past half-century.  In 1960, health spending represented just 5.2% of GDP.  By 2010, that proportion ballooned to 17.9%.  Per capita spending has experienced an even more dramatic increase.  In 2000, health spending per capita was $4,878, but after just a decade, that figure rose to $8,402.  Compared to other countries, the U.S. spends far more on health care both per capita and as a percentage of its GDP.  Switzerland’s $5,270 spent on health care per capita makes the nation a distant second to the U.S. in health spending.

Over the past 50 years, the question of who foots the health care bill has constantly changed.  In 1960, the bulk of health care funds came from out-of-pocket spending. Today, however, government programs like Medicare and Medicaid along with private insurance cover the majority of costs, and hospital care, physician and clinical services, and prescription drugs all necessitate far less out-of-pocket spending.  For instance, in 1960, nearly all of the money for prescription drug costs (96%) came from the consumers’ pockets.  In 2010, out-of-pocket spending accounted for just 19% of the expenditures.