Reduction in US Health Care Spending Required to Meet the Institute of Medicine's 2030 Target

Abstract

Objectives. To quantify changes in US health care spending required to reach parity with high-resource nations by 2030 or 2040 and identify historical precedents for these changes.Methods. We analyzed multiple sources of historical and projected spending from 1970 through 2040. Parity was defined as the Organisation for Economic Co-operation and Development (OECD) median or 90th percentile for per capita health care spending.Results. Sustained annual declines of 7.0% and 3.3% would be required to reach the median of other high-resource nations by 2030 and 2040, respectively (3.2% and 1.3% to reach the 90th percentile). Such declines do not have historical precedent among US states or OECD nations.Conclusions. Traditional approaches to reducing health care spending will not enable the United States to achieve parity with high-resource nations; strategies to eliminate waste and reduce the demand for health care are essential.Public Health Implications. Excess spending reduces the ability of the United States to meet critical public health needs and affects the country's economic competitiveness. Rising health care spending has been identified as a threat to the nation's health. Public health can add voices, leadership, and expertise for reversing this course.

FIGURE 1—

Total Health Spending per Capita in Selected OECD Nations, 1970–2018 Note. OECD = Organisation for Economic Co-operation and Development. The countries included are Canada (CAN), France (FRA), Switzerland (CHE), Great Britain (GBR), and the United States. All US spending totals are adjusted for inflation to 2018 US dollars. All international spending totals are purchasing power parity adjusted to 2018 US dollars. An alternative measure of health care spending is the percentage of a nation’s gross domestic product devoted to health care (see Figure C, available as a supplement to the online version of this article at http://www.ajph.org). When viewed graphically these 2 measures, although conceptually distinct, represent similar views of US health care spending in comparison with OECD nations over the time period assessed.

FIGURE 2—

Hypothetical Health Care Spending Comparison From 2018 to 2050 Assuming That All US Spending Growth Stopped as of 2018 and Spending Trends Among Various Percentiles of Organisation for Economic Co-operation and Development (OECD) Nations Continued