Healthcare Spending Now Accounts For Almost One-Fifth Of The Entire U.S. Economy

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Everybody agrees that healthcare costs are way too high.  Back in 1960, healthcare spending accounted for approximately 5 percent of GDP, and by 2020 it is being projected that healthcare spending will account for 20 percent of GDP.  And when you break those numbers down into actual dollars, they become even more staggering.  Back in 1960, an average of $146 was spent on healthcare per person for the entire year, but today that number has skyrocketed to $9,990.  On a per capita basis, we spend far more than anyone else in the world on healthcare.  In fact, we spend almost twice as much as most other industrialized nations on a per capita basis.  Something has gone terribly wrong, and we desperately need to get this fixed.


Just between the years of 1996 and 2013, our spending on healthcare rose by a whopping 900 billion dollars, and it is estimated that healthcare spending now accounts for nearly one-fifth of the entire U.S. economy.  The following comes from the Daily Mail

US healthcare spending rocketed $900 billion between 1996 and 2013, staggering new data reveal.

Americans spend more money on healthcare than any other population, and increasingly so.

By 2013, total healthcare spending hit $2.1 trillion, according to the study published today in the Journal of the American Medical Association. The researchers say that figure has now likely soared to more than $3.2 trillion, which equates to 18 percent of the country’s economy.

So why is healthcare spending going up so much?

Well, the truth is that our population is aging, obesity is certainly on the rise, and medical care has become much more expensive.  In addition, we should acknowledge there are a couple of other major factors that we should acknowledge as well

First, the United States relies on company-sponsored private health insurance. The government created programs like Medicare and Medicaid to help those without insurance. These programs spurred demand for health care services. That gave providers the ability to raise prices. Other efforts to reform health care and cut costs raised them instead.

Second, chronic illnesses, such as diabetes and heart disease, have increased. They are responsible for 85 percent of health care costs. Almost half of all Americans have at least one of them. They are expensive and difficult to treat.

As a result, the sickest 5 percent of the population consume 50 percent of total health care costs. The healthiest 50 percent only consume 3 percent of the nation’s health care costs.

Healthcare costs are only expected to rise even more in the years ahead, and so we desperately need to reform our system.

Because as it is, health insurance premiums are becoming completely unaffordable.  According to CNBC, health insurance premiums for plans purchased through an employer will be higher than ever next year…

Next year, employers expect to spend $8,527 per enrolled employee, according to data form the National Business Group on Health. Meanwhile, workers themselves will contribute an average of $2,752 toward their premiums.

And for those that have to purchase their own health insurance, things are even worse.  In fact, it is being projected that the average rate increase for Obamacare plans will be 37 percent in 2018.

When I get elected to Congress, I am going to make repealing Obamacare and fixing our broken healthcare system one of my highest priorities.

We need a system that is focused on the relationship between doctors and patients.  Compared to the rest of the world, we spend way too much on administrative costs, and we desperately need legal reform.  I would like to see Congress legalize the kind of association buying groups that Rand Paul has been proposing, and I would like to see exciting new models such as direct primary care used much more extensively.

There is no way that we should be spending nearly twice as much on healthcare as everyone else in the industrialized world on a per capita basis.  We must streamline the system, and we need to start using some common sense.

Unfortunately, common sense is in short supply in Washington D.C. these days, but hopefully we can start to change that.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on

  • Someone

    Those figures don’t even account for the money spent by those of us smart enough to pay full price for holistic doctors because none of them are covered by insurance.

    • iris

      agree, for those who can afford them, and, if they are good at their jobs!

  • Wayne Jon Pearson.

    Well it’s no surprise unfortunately that this is the predicament that the USA faces in regards to the their collapsing ”Health-care” system & the ever increasing spiralling costs of ”Health-care.” This is what happens when you set up a system of Universal Health Care based on a Roman Catholic concept. It will eventually & inevitably collapse under the weight of burgeoning costs I’m afraid & sad to say. LIBERTY FOREVER!!!

  • iris

    Thanks, Michael, however the model of direct primary care is the old one, not the new. Along with new discoveries and technologies, many doctors are specializing now in order to stay afloat. They are often well versed in their specialties, but rely more on the technology, while the primary care physician is tending to basic care and diagnoses and referring out to the specialists when they recognize the need or suspect something is beyond their expertise. We need both, but I agree with you in that the relationship needs to be foremost; between patient and doctor, not patient with insurance, doctor with insurance, doctor with government, insurance with government.

  • Bernd

    Nothing has gone wrong. Everything has been working as it is designed to work.

    Government got involved in medical care starting in 1910 (with the foundation funded flexner report) to increase prices and has been doing so since. The objection of those who lobbied the government was that doctors were too numerous and made too little. The goal since has always been to increase the portion of american’s wealth going to the medical industry. At every step high prices are not dealt with, simply the bills socialized so they can pushed higher yet.

    Furthermore other actions by government aim to increase demand for medical goods and services.

  • Blue Eyed Guy

    Since Obamacare healthcare costs have become a real burden to the average middle class family. I just pay for myself and my spouse and how much gets taken out hurts how much I take home. I don’t even know how families with children can do it.