The cost of health care in the United States far exceeds that in other wealthy nations across the globe. In 2020, U.S. health care costs grew 9.7%, to $4.1 trillion, reaching about $12,530 per person.1 At the same time, the United States lags far behind other high-income countries when it comes to both access to care and some health care outcomes.2 As a result, policymakers and health care systems are facing increasing demands for more care at lower costs for more people. And, of course, everyone wants to know why their health care costs are so high.
The answer depends, in part, on who’s asking this question: Why does U.S. health care cost so much? Public policy often highlights and targets the total cost of the health care system or spending as a percentage of the gross domestic product (GDP), while most patients (the public) are more concerned with their own out-of-pocket costs and whether they have access to affordable, meaningful insurance. Providers feel public pressure to contain costs while trying to provide the highest-quality care to patients.
This brief is the first in a series of papers intended to better define some of the key questions policymakers should be asking about health care spending: What costs are too high? And can they be controlled through policy while improving access to care and the health of the population?
What (or Who) Is to Blame for the High Costs of Care?
Total U.S. health care spending has increased steadily for decades, as have costs and spending in other segments of the U.S. economy. In 2020, health care spending was $1.5 trillion more than in 2010 and $2.8 trillion more than in 2000. While total spending on clinical care has increased in the past two decades, health care spending as a percentage of GDP has remained steady and has hovered around 20% of GDP in recent years (with the largest single increase being in 2020 during the COVID-19 pandemic).1 Health care spending in 2020 (particularly public outlays) increased more than in previous years because of increased federal government support of critical COVID-19-related services and expanded access to care during the pandemic. Yet, no single sector’s health care cost — doctors, hospitals, equipment, or any other sector — has increased disproportionately enough over time to be the single cause of high costs.
Why Contract Cost Care?
As a pioneer in contract optimization, we providing Clinics and Hospitals customized maintenance solutions for their medical treatment infrastructure. We generate cost savings.