ESRD as a Window into America's Cost Crisis in Health Care

Abstract

The United States is facing a severe crisis over health care costs. Although nearly 15% of the population—some 45 million people—lack health insurance,1 per capita health care expenditures in the United States are approximately twice as high as in other industrialized countries,2 most of which provide near-universal health insurance coverage. Despite these high per capita health care expenditures, health outcomes in the United States are no better, and arguably significantly worse, than in these other countries.3 Moreover, because health care expenditures in the United States have been rising at a rate almost 3% faster than the economy as a whole over the past 30 yr, health care expenses have been absorbing an ever-increasing fraction of the gross domestic product (GDP).4 Even before the current severe recession, it had been estimated that if current trends continue, health care expenses would represent 30% of the GDP within 30 yr, and that the Medicare hospital insurance trust fund would be exhausted within a decade.5 Some have argued that the projected increase in health care expenditures to consume a higher and higher fraction of GDP is not necessarily a problem.6,7 After all, the health care industry itself is an important driving force of the economy and its growth creates new jobs. Moreover, as long as the economy as a whole enjoys sufficient growth, devoting an increasing share of GDP to health care need not reduce absolute spending in areas other than health care, and therefore need not reduce the standard of living. But now that it represents over one-sixth of the national economy, the inefficiency of the American health care system represents a grave threat to America's economic competitiveness. Again, it should be emphasized that per capita health care expenditures in the United States are twice …