Share This Article:

U.S. National Healthcare Expenditures: Demonstration and Explanation of Cubic Growth Dynamics

Abstract Full-Text HTML Download Download as PDF (Size:145KB) PP. 105-110
DOI: 10.4236/tel.2011.13022    4,319 Downloads   8,110 Views   Citations

ABSTRACT

U.S. national healthcare expenditures (NHE) increased from under 28 billion dollars in 1960 to over 1.35 trillion dollars in 2000. This enormous growth threatens the sustainability of the provision of healthcare. By definition, in any year, current NHE must equal population times consumer price index (CPI) times per capita CPI-adjusted constant dollar healthcare expenditures. Linear relationships were observed over time with total population (r2 > 0.99), with CPI (r2 > 0.96), and with per capita CPI-adjusted dollar healthcare expenditures (r2 > 0.98). The finding that those three factors were well described by linear equations suggests that NHE growth should display cubic dynamics over time. NHE from 1960 through 2000 did display cubic growth dynamics (r2 > 0.99). Moreover, actual NHE from 1960 through official U.S. government NHE projections in 2019 also displayed cubic growth dynamics (r2 > 0.99). This model explains why U.S. NHE has displayed cubic growth dynamics and suggests that U.S. NHE will continue to display cubic growth dynamoics as long as increases in population, CPI, and per capita CPI-adjusted constant dollar healthcare expenditures continue to increase reasonably linearly over time.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

J. Riggs, J. Hobbs, G. Hobbs and T. Riggs, "U.S. National Healthcare Expenditures: Demonstration and Explanation of Cubic Growth Dynamics," Theoretical Economics Letters, Vol. 1 No. 3, 2011, pp. 105-110. doi: 10.4236/tel.2011.13022.

References

[1] T. Bodenheimer, “High and Rising Health Care Costs. Part 1: Seeking an Explanation,” Annals of Internal Medicine, Vol. 142, 2005, pp. 847-854.
[2] T. Bodenheimer, “High and Rising Health Care Costs. Part 2: Technologic Innovation,” Annals of Internal Medicine, Vol. 142, 2005, pp. 932-937.
[3] T. Bodenheimer, “High and Rising Health Care Costs. Part 3: The Role of Health Care Providers,” Annals of Internal Medicine, Vol. 142, 2005, pp. 996-1002.
[4] T. Bodenheimer, “High and Rising Health Care Costs. Part 4: Can Costs be Controlled While Preserving Quality?” Annals of Internal Medicine, Vol. 143, 2005, pp. 26-31.
[5] E. French and J. B. Jones, “On the Distribution and Dynamics of Health Care Costs,” Journal of Applied Economics, Vol. 19, No. 6, 2004, pp. 705-721. doi:10.1002/jae.790
[6] C. G. Hempel and P. Oppenheim, “Studies in the Logic of Explanation,” Philosophy of Science, Vol. 15, No. 2, 1948, pp. 135-175. doi:10.1086/286983
[7] N. Rescher, “On Prediction and Explanation,” British Journal for the Philosophy of Science, Vol. 8, No. 32, 1958, pp. 281-290. doi:10.1093/bjps/VIII.32.281
[8] M. Scriven, “Explanation and Prediction in Evolutionary Theory,” Science, Vol. 130, No. 3374, 1959, pp. 477-482. doi:10.1126/science.130.3374.477
[9] J. F. Hanna, “Explanation, Prediction, Description, and Information Theory,” Synthese, Vol. 20, No. 3, 1969, pp. 308-334. doi:10.1007/BF00413732
[10] D. Dharmapala and M. McAleer, “Prediction and Accom- modation in Econometric Modeling,” Environmetrics, Vol. 6, No. 5, 1995, pp. 551-556. doi:10.1002/env.3170060522
[11] P. R. Orszag and P. Ellis, “The Challenge of Rising Health Care Costs—A View from the Congressional Budget Office,” New England Journal of Medicine, Vol. 357, No. 18, 2007, pp.1793-1795. doi:10.1056/NEJMp078190
[12] D. E. Altman and L. Levitt, “The Sad History of Health Care Cost Containment Astold in One Chart,” Health Af- fairs (Millwood), Suppl Web Exclusives W83-4, 2002. http://content.healthaffairs.org/content/early/2002/02/23/hlthaff.w2.83.full.pdf+html
[13] T. Bodenheimer, “The Not-So-Sad History of Medicare Cost Containment as Told in One Chart,” Health Affairs (Millwood), Suppl Web ExclusivesW88-90, 2002. http://content.healthaffairs.org/content/early/2002/02/23/hlthaff.w2.88.full.pdf+html
[14] S. H. Altman, C. P. Tompkins, E. Eilat and M. P. V. Gla- vin, “Escalating Health Care Spending: Is It Desirable or Inevitable?” Health Affairs (Millwood), Suppl Web Exclusives W3-1-14, 2003. http://content.healthaffairs.org/content/early/2003/01/08/hlthaff.w3.1.long
[15] M. V. Pauly, “Should We Be Worried about High Real Medical Spending Growth in the United States?” Health Affairs (Millwood), Suppl Web Exclusives W3-15-27, 2003. http://content.healthaffairs.org/content/early/2003/01/08/hlthaff.w3.15.long
[16] H. J. Aaron, “Should Public Policy Seek to Control the Growth of Health Carespending?” Health Affairs (Mill- wood), Suppl Web Exclusives W3-28-36, 2003. http://content.healthaffairs.org/content/early/2003/01/08/hlthaff.w3.28.full.pdf+html

  
comments powered by Disqus

Copyright © 2019 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.