U.S. Healthcare Index - Increasing Costs
Our research revealed that the total healthcare costs in the US increased by a growth rate of 5.3%-5.5% from 2017 to 2018. Therefore, we were able to estimate that the total healthcare costs in the US increased by $0.185-$0.192 trillion from 2017 to 2018. All the details of our research have been presented below along with the key findings.
Healthcare costs in the US
Our research team started the research by understanding the concept of healthcare costs. From the government website of CMS, we were able to understand that healthcare costs include spending by "type of good or service delivered (hospital care, physician and clinical services, retail prescription drugs, etc.), source of funding for those services (private health insurance, Medicare, Medicaid, out-of-pocket spending, etc.), and by sponsor (businesses, households, and governments)." Thereafter, we looked into the research report published by CMS called National Health Expenditure (NHE) Fact Sheet. The recently updated report provided information on annual healthcare costs and healthcare costs per person in the US in 2017. The report also provided information regarding the projected growth rate of those costs.
The NHE Fact Sheet reported that the total healthcare cost in the US in the year 2017 was $3.5 trillion and the cost per person was $10,739. According to the report, the projected growth rate for 2017 to 2027 was 5.5%. Even though the report was updated in 2019, it did not contain much information for the year 2018 (only the projected growth rate). Therefore, we started looking for other industry reports, medical articles, and research reports. On The Balance, we were able to find a medical article that discussed the rising costs of healthcare in the US. It provided a complete year-by-year breakdown of the costs. However, it did not go further than the year 2017 as well. We found another medical article on Reuters that also discussed the rising costs of healthcare in the US. The article also did not provide information beyond 2017. Since we had found the sources already, we verified and made our findings more credible by corroborating the three sources. All the reports and articles were published either in 2018 or 2019 and yet did not contain information beyond the year 2017. Therefore, we were able to conclude that the information regarding the healthcare costs in the US for the year 2018 has not been published yet. Therefore, we could not include a breakdown of the increase in different areas of healthcare in the US from 2017 to 2018.
The information regarding the total annual healthcare costs in the US for 2017 was the same in all three sources. However, on Reuters, the growth rate of the costs from 2017 to 2018 in the US was provided as 5.3%. Therefore, we determined that the actual growth rate for the total healthcare costs in the US ranged from 5.3% to 5.5%. We had the data for 2017 and the growth rate for 2018. Thus, we decided to triangulate the data for 2018.
- Total healthcare costs for 2017 = $3.5 trillion
- Minimum growth rate for 2018= 5.3%
- Minimum healthcare costs for 2018 = ($3.5+$0.185) trillion = $3.685 trillion
- Minimum growth amount per person for 2018 = 5.3% of $10,739 = $569.167
- Minimum healthcare costs per person for 2018 = $569.167+$10,739 = $11308.167
- Maximum growth rate for 2018 = 5.5%
- Maximum healthcare costs for 2018 = )$3.5+0.192) trillion = $3.692 trillion
- Maximum growth amount per person for 2018 = 5.5% of $10,739 = $590.645
- Maximum healthcare costs per person for 2018 = $590.645+$10,739 = $11329.645
Therefore, the total healthcare costs in the US increased by 5.3%-5.5% ($0.185-$0.192 trillion) from $3.5 trillion in 2017 to $3.685 trillion-$3.692 trillion in 2018.
Similarly, the healthcare costs per person in the US increased by $569.167-$590.645 from $10,739 in 2017 to $11,308.167-$11,329.645 in 2018.