No abstract

Medical goods and services are generally viewed as necessities. Even so, the latest recession had a dramatic effect on their utilization. US health spending grew more slowly in 2009 and 2010-at rates of 3.8 percent and 3.9 percent, respectively-than in any other years during the fifty-one-year history of the National Health Expenditure Accounts. In 2010 extraordinarily slow growth in the use and intensity of services led to slower growth in spending for personal health care. The rates of growth in overall US gross domestic product (GDP) and in health spending began to converge in 2010. As a result, the health spending share of GDP stabilized at 17.9 percent.

In 2009, US health care spending grew 4.0 percent--a historically low rate of annual increase--to $2.5 trillion, or $8,086 per person. Despite the slower growth, the share of the gross domestic product devoted to health spending increased to 17.6 percent in 2009 from 16.6 percent in 2008. The growth rate of health spending continued to outpace the growth of the overall economy, which experienced its largest drop since 1938. The recession contributed to slower growth in private health insurance spending and out-of-pocket spending by consumers, as well as a reduction in capital investments by health care providers. The recession also placed increased burdens on households, businesses, and governments, which meant that fewer financial resources were available to pay for health care. Declining federal revenues and strong growth in federal health spending increased the health spending share of total federal revenue from 37.6 percent in 2008 to 54.2 percent in 2009.

This article presents estimates of personal health care spending by age and gender in selected years during the period 2002-10 and an analysis of the variation in spending among children, working-age adults, and the elderly. Our research found that in this period, aggregate spending on children's health care increased at the slowest rate. However, per capita spending for children grew more rapidly than that for working-age adults and the elderly. Per capita spending for the elderly remained about five times higher than spending for children. Overall, females spent more per capita than males, but the gap had decreased by 2010. The implementation of Medicare Part D, the effects of the recent recession, and the aging of the baby boomers affected the spending trends and distributions during the period of this study.

In 2013 US health care spending increased 3.6 percent to $2.9 trillion, or $9,255 per person. The share of gross domestic product devoted to health care spending has remained at 17.4 percent since 2009. Health care spending decelerated 0.5 percentage point in 2013, compared to 2012, as a result of slower growth in private health insurance and Medicare spending. Slower growth in spending for hospital care, investments in medical structures and equipment, and spending for physician and clinical care also contributed to the low overall increase.