National and surgical health care expenditures, 2005-2025

Abstract

Objective and background: Health care expenditures for 2005 in the United States were $1.9733 trillion and 15.9% of the gross domestic product (GDP). Twenty-nine percent of those expenditures were secondary to surgical revenues. Health care expenditures are increasing 2(1/2) times the rate of the general US economy and are being fed by new technologies, new medications, the aging population, more services provided per patient, defensive medicine and little tort reform, the insurance system, and the free rider problem, ie, patients are cared for as emergencies regardless of insurance coverage and legality, which all have contributed to rising health care and surgical expenditures over the last 50 years.

Methods: The purpose of this study was to project aggregate national health care expenditures, aggregate surgical health care expenditures, and the United States GDP for the years 2005-2025. Model building and existing state and national data were used. Aggregate surgical health care expenditures were computed as 29% of aggregate health care expenditures using a unique model developed by the late Dr. Francis D. Moore. The model of Dr. Moore which used 1981 federal data was verified/tested using data from UMDNJ-University Hospital, and New Jersey and national data from 2005. From 1965 to 2005 mean health care expenditures increased at 4.9% per year, and US GDP increased at a mean of 2.1% per year.

Results: Aggregate surgical expenditures are expected to grow from $572 billion in 2005 (4.6% of US GDP) to $912 billion (2005 dollars) in the year 2025 (7.3% of US GDP). Aggregate health care expenditures are projected to increase from $5572 per capita (15.9% of GDP) in 2005 to $8832 per capita (2005 dollars) in 2025 (25.2% of US GDP). Both surgery and national health care expenditures are expected to expand by almost 60% during the period 2005-2025. Thus, surgical health care expenditures by 2025 are likely to be 1/14 of the US economy, and health care expenditures will be (1/4) of the US economy.

Conclusions: Real per capita GDP growth is relatively flat in the United States. Rising surgical health care expenditures and national health care expenditures are a significant issue for the US population. Unfortunately, programs at the state and federal level as well as private programs, for the last 50 years have not been able to slow the growth in health care expenditures. These trends are likely to continue and the effects will be: * A change in the US standard of living as surgical and health care expenditures become a larger part of the earned dollar per American especially with the current volatility of the US economy, * A rise in the cost of products made in the United States to pay the rising health care bill with a concomitant change in our national and international standard of living, and * An increasing debt and increases in federal and state taxes which will be required to maintain the current health care system, ie, Medicare, Medicaid, and the private health care insurance payment scheme, which has not changed substantially over the past 40 to 50 years. Surgeons must look at the incremental benefit of new technologies and procedures and determine which to choose if we are to slow the growth of surgical health care expenditures.