Abstract

The rising cost of medical care in the United States over the past quarter century has become a matter of growing concern for both private citizens and govern­ ment at all levels. National health expenditures increased almost 12-fold between 1960 and 1982, from $26.9 billion to $322. 4 billion, or from 5.3% of the gross national product (GNP) to 10.5%. Only a small part of this increase is attributable to the increase in the population, which grew by only about 30% during this period. The major factors accounting for the increase in spending for medical care are the steady rise in medical care prices, which increased at a faster pace than did the prices of all other goods and services; greater use of health services because of higher real incomes and more comprehensive health insurance coverage; changes in medical technologies, such as the introduction of new and more expensive forms of treatment; and last but not least, the increase in the number and proportion of persons aged 65 years and older, who have higher medical care expenses per capita than younger persons. It is this last problem, the high medical expenses of the elderly, which has been receiving special attention in recent years. One reason for this concern is the drain these expenses are putting on the Medicare Hospital Insurance Trust Fund, which is in danger of a deficit by the end of the century unless changes are

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