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Health care costs are 15.5% of GDP

BU’s School of Public Health just released a study indicating US health care costs will be $1.9 trillion in 2005, an increase of $621 billion over 2000. The study also reported that health care is a major driver in GDP growth, with this sector of the economy responsible for a disproportionally high amount (24%) of the growth in GDP.
Two specific items deserve attention, one related to what we get for what we pay, and the other concerning what drives medical inflation.
“The report found that per capita health care spending in the United States on average is double that of Canada, France, Germany, Italy and Britain, which provide universal health coverage to residents.
The report stated, “Current U.S. spending should be adequate to cover all Americans.”
The obvious question remains, what is driving these astronomical increases? While that question has many answers, according to the LA Times one of the more provocative is “doctors receive or determine how to spend 87% of health care spending, with tests and services ordered by doctors comprising 66% of health care spending and doctors’ fees accounting for 21%. ”
When one strips away all the details and nuance of technology, pharma, hospital increases, nursing shortages, and end-of-life care, it always comes down to the treating physician.

The treating doc is the key to delivering care and managing cost.

2 thoughts on “Health care costs are 15.5% of GDP”

  1. “it always comes down to the treating physician”
    I remember reading this in 1971.
    What is the news here?

  2. a lot of people read this before, and have read it since.
    the “news” is very few companies are doing anything about it. is your company?

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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