Decomposing the effect of four key determinants leading to increases in US health spending: 1996 – 2013
To estimate the effects of changes in demography and epidemiology, we utilized population estimates, and disease prevalence and incidence estimates from the Global Burden of Disease 2013 study. Data on volume, price, and expenditure of health care are obtained from the U.S. DEX research project. To estimate the effect of changes in utilization, we measure the number of medical visits per prevalent case, at the age-sex level. All data are obtained for 1996 through 2013. We use formal demographic decomposition methods to measure changes in health spending attributable to each of the four drivers.
Preliminary results indicate that changes in epidemiology and utilization between 1996 and 2013 explain very little of the increases in health spending. Changes in demographic structure, and the aging and growing of the U.S. population, explains more; although increasing prices and technology explain the lion’s share of increases health expenditure. These results vary for distinct causes, types of healthcare, and age groups. Understanding the causes of increased health expenditure can lead to more cost-effective interventions and policy setting to help contain the already growing cost of healthcare in the U.S. These estimates show that different factors are driving increases in expenditure for different causes and ages.