Healthcare Spending Now Accounts For Almost One-Fifth Of The Entire US Economy

Tyler Durden's picture

Authored by Michael Snyder via The American Dream blog,

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

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Bigly's picture

Thinking of going insurance-less for the first time in my adult life.

Premiums are dumb high, but don't cover things properly post large deductible.

Trump needs to elim the mandate


adolphz's picture

It will get worse, come to Europe  to see the end of what the American system will be.

abyssinian's picture

bullish, that means everyone is cheirshing good health over jobs!  buy buy buy, 

LSD - Lower Slower Delaware's picture

Please pass the lard samiches, jumbo fires, and Super Big Gulps of Coke. I have some moar health care bills to pile up (insert HUGE belch here). And where's muh Tee Vee remote? Oprah reruns are on for the next six hours...


NoDebt's picture

"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."

Pffft.  That's nothing.  In 1960 a college education cost $50/year.  Now it's $5,000,000,000,000 a year.


new game's picture

i simply can not afford unaffordable HC. Put another way, I canNOT afford to drive a porche, mercedes or an audi A8.

i am not eating cat food, ramon, or shit food to subsidize what lsd just posted above.

mandate, what mandate. be free by ignorance...

seriously, we are talking, premiums plus deductable which would 10k per year. i'll roll the health dice, thank you, you fuk'g cukfukers...

also as a side note, i have a 1099 delivery business and i deliver to contractors. hospitals are adding on, are remodeling and big source of my delivery revenue- suprise, suprise, fuk'g gushers of cash.

2nd side note: they will finance the deductible. suprise, suprise, HC providers are becoming bankers. 

are you sad, mad, or just plain want to "get away"... lol

Justin Case's picture

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

But realize merika has grown fat, dumb, lazy, spoiled, dishonest and cowardly. Artificial food, flavours, colours, preservatives,fat and little activity. Watching sports on tee vee is not excercise.

techpriest's picture

If it makes you feel any better, in the dietetics community there is a rapidly growing trend among the public to reject the worst of the artificial ingredients.

However, we need to go a step farther and reject excess grains and the low-fat, high carb diets that feed depression and obesity.

GUS100CORRINA's picture

Healthcare Spending Now Accounts For Almost One-Fifth Of The Entire US Economy

My response: This ladies and gentlemen of ZH is BULLSHIT!!!!


The US ECONOMY is in recession without HEALTHCARE as part of the equation.


NoDebt's picture

I blame home appendectomies.


SixIsNinE's picture



My response:  REPEAL the CSA and our problems will evaporate  as humanity returns with the miraculous medicines MDMA & the psychedelic class of entheogenic medicines.

(CSA - Controlled Substances Act - source of all malevolent inhumane behavior resulting in blasphemous police state metastasizing upon us)


Go Trumpus Maximus!

chiaroscuro's picture

You might want to look into Christian Healthcare Sharing Ministries if you meet their criteria. These programs are exempt from the requirements of Obamacare. They offer high deductible plans that are much more affordable than conventional health insurance premiums and pair nicely with Direct Primary Care as well. 

adolphz's picture

Obamacare and Healthcare industry Collusion?  That is what we see 

Oldwood's picture

Absolutely. Insurance heads were screaming about this till Obama threatened to silence them. They eventually came around understanding that Obamacare would make them all rich...before it all blew to hell and they were long gone. A claim of crisis to enable sweeping legislation that has created the REAL crisis, of which now we find our our huge and generously benevolent government willing and able to step in and save us....with universal Medicaid. DAMN these free markets that have so destroyed our healthcare system. If we had only had Obamacare thirty years ago....

SixIsNinE's picture

good work oldwood - now someone get Trumpus to retweet this out !


Bigly's picture

Swedish leaving. Bertolini probably soon. Cordani has been there awhile. Hemsley left rather recently.

All of the CEO sellouts on this have bailed, are bailing, or will be soon.


illuminatus's picture

I don't believe there is a way to fix anything in this country as long as we allow our leadership, judicial system, wall street and especially the banksters to get away with everything and anything they deem without any consequence to them. What we have here is the rape of Americans, and 'we the people' can cry bitch and moan all we care to, that won't change anything.

Juggernaut x2's picture

But Trump is going to MAGA- he promised!

SixIsNinE's picture

hell yeah!   

Because Trumpus Maximus,   he's the REAL Juggernaut BitCheZZ!


ClickNLook's picture

Don't kid yourself, you are not letting anyone to get away with anything.

You are just a circus spectator. Like everyone else you know.

And me too.

CaptainObvious's picture

Jesus H. Christ, Snyder's running for Congress now?  Can you just imagine the legislation he would introduce? 

"I am against __________ for the following reasons:

1) (internet link)

2) (internet link)

3) (internet link) (internet link) a few words (internet link)

4) (internet link that doesn't really say what I'm implying it says)


buzzsaw99's picture

my 19 reasons why this bill sucks...

Bigly's picture

Yeah, but who is his competition? He may be far superior.

Let's face it, generally only the dregs have been in office previously.

We need real, uncorrupted, normal people in office

buzzsaw99's picture

agreud.  i was only joking.


lighten up francis.  [/sgt. hulka]

Blue Steel 309's picture

It is not WHO is in office that is important. The Constitution should be scrapped and re-ratified in a form that is closer to the stated goals, without the loopholes and federalism.

rejected's picture

They already done that once and we are paying the price. The Articles of CONfederation explicitly gave the States and citizens sovereignty. The Founders decided to make a few changes.  They deleted everything after We the People,,,, and came up with new and improved Constitution which made the central government sovereign... a federation.

Now since no one ever abides by a constitution I see no point in the effort, Like the first time you will just end up with something worse. And if there's something the government doesn't particularly care for they'll just ignore it like they do this constitution.

rejected's picture

Where you going to find them in America?

Bigly's picture

They would not step foward on their own most likely. They should be pulled from regular life.

RafterManFMJ's picture

I rag on him, but would vote for him.

NoDebt's picture

...... as I've explained many times before <here>, <here> and <here>.

Green arrow.


Stan Smith's picture

Two of the largest industries in this country are health care and higher education.    And both are obscenely over priced (especially when you consider the results) almost exclusively because they both have guaranteed money from the federal government thrown at them all the time.

This isnt that hard to figure out.

Oldwood's picture

We all may have to join the military and get shot before we can afford healthcare soon. Alternatives turning NASTY.

ClickNLook's picture

Forgetting something?

Starts with M and ends with ilitary.

seek's picture

And it's no coincidence that both has massive and growing administative expenses. The ratio of admin to teachers in education v. 20-30 years ago is insane.

Of course what does that admin do? Handle the money. No accident.

RafterManFMJ's picture


They are not industries. They are a GDP suck, not a GDP add.

Add in all the non-industry ‘industries’ along with all the .gov jobs and real GDP is probably 1/3 of the reported number.

TrustbutVerify's picture

What percentage spent goes to products and services from or in foreign countries?

And we wonder why people are under-employed?

Mena Arkansas's picture

Why? Why has medical care has become much more expensive?

Pure greed. Wall Street, insurance companies, labs, hospitals, pharma, doctors, etc.

Pure fucking greed because they know they can hold a gun to your head and rob you blind.

It's the costs. It has always been the costs.

Umh's picture

Largely because people spending insurance money spend like drunken sailors.

Mena Arkansas's picture

Perhaps, but it makes a world of difference whether that pill costs $1 or a $100.

rejected's picture

Someone has to pay for all the free pills going to 3rd world countries.

Umh's picture

And the pills cost so much because? Greed, yes greed is a part of it. Because it is 'free money' is another part of it.

Umh's picture

Largely because people spending insurance money spend like drunken sailors. Late life healthcare that extends someones life for an additional few months of misery cost a great deal and delivers very little in real terms and is very hard for most people to turn down.

I have asked several people over the years what was the biggest change that they saw in their life, the answers are interesting. One man said vacines and I think that was a great medical advancement. The reason the average age of death hung around 35 for some many years was not that middle age people croaked suddenly. It was that so many young people died of contagious diseases and so many women died in child birth. Preventing those deaths was great, keeping someone alive for a few extra months is rubbish.

ClickNLook's picture

Yeah, rubbish, until it is YOUR life that needs extension.

Umh's picture

I do not know who you are. I have seen more than enough people in misery to know which path I will take. Do not get me wrong, six months or six years of good life is worth it, but months in misery really do not help. We are all going to die, I would rather die as gracefully as possible. There are articles on doctors that know their chances, maybe you should search for them.

ClickNLook's picture

It is hospitals, insurance and pharma triangle.
Doctors are in there on a hook. Not happy about it too.

When you are balancing your personal budget, you start with cutting the expenses first.

However, if you have free money coming in, you would be inclined to inflate expenses as much as possible. To encourage the bigger influx of the free money.

Just human nature..

And we have congress lawmakers effectively bribed by lobbyists.

Please remind me what Trump was saying about limiting terms and stopping lobbying before he was elected a year ago?