What's Driving Health Care Costs?

National health care spending reached $1.6 trillion in 2002, accounting for one-seventh of the U.S. economy, or 14.9 percent of gross domestic product (GDP). Federal Medicare and Medicaid spending accounted for one-fifth of total federal outlays in fiscal year 2002, with Medicare at 12.7 percent and Medicaid at 7.4 percent of outlays. Health care costs are a longstanding concern to policymakers. For years, health care spending has been rising faster than the rate of economic growth, raising the question of whether we are getting good value for the spending.

This Issue Brief was prepared for The Commonwealth Fund/John F. Kennedy School of Government Bipartisan Congressional Health Policy Conference, January 15–17, 2004.