Chernew%20et%20al_Increased%20Spending_Health%20Affairs -...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Increased Spending On Health Care: How Much Can The United States Afford? It remains to be seen whether U.S. consumers will accept the growing percentage of income growth devoted to health care that is forecasted over the next several decades. by Michael E. Chernew, Richard A. Hirth, and David M. Cutler PROLOGUE: The question of affordability, be it at the micro level of the individual household or the macro level of state and federal governments, is often a subject of consuming interest because resources are far more scarce than demands for their use. During a period when health care spending continues to soar even in a sour economy, this question becomes all the more important. And, of course, the views of any particular stakeholders are overwhelmingly influenced by their role in the system. In this paper three economists bring new thinking to the subject of affordability and come up with an answer that may well surprise some readers. Economists Michael Chernew, Richard Hirth, and David Cutler step back from all of the expressed concern over escalating costs and examine how these increases relate to overall spending. Using the Medicare Technical Advisory Panel’s defini- tion of affordability and making a couple of critical assumptions, they plot a trajec- tory for increased health spending out to 2075. They conclude that although we may not want to spend more on health care, we can afford to do so without reduc- ing overall non–health care spending. Readers may disagree about their assump- tions but may appreciate a fresh look at the health care “guns versus butter” debate. Chernew is an associate professor in the Departments of Health Management and Policy, Economics, and Internal Medicine at the University of Michigan in Ann Arbor and codirector of the Robert Wood Johnson Foundation’s Scholars in Health Policy Research program at the University of Michigan. A graduate of the University of Pennsylvania, he received his doctorate in economics from Stanford University. Hirth is also an associate professor at the University of Michigan in the Departments of Health Management and Policy and Internal Medicine. He earned his doctorate in economics from the University of Pennsylvania. David Cutler, an economics professor at Harvard University, has served on the Council of Eco- nomic Advisers and as director the National Economic Council as well as the Medicare Technical Advisory Panel. Elected to the Institute of Medicine in 2001, Cutler writes extensively in health economics. He holds a doctorate in economics from the Massachusetts Institute of Technology. Increased Spending HEALTH AFFAIRS ~ Volume 22, Number 4 15 ©2003 Project HOPE–The People-to-People Health Foundation, Inc.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
ABSTRACT: Perceptions of whether health care cost growth is affordable contribute greatly to pressures for health system reform. In this paper we develop a framework for thinking about affordability, concluding that a one-percentage-point gap between real per capita growth in health care costs and growth in GDP would be affordable through 2075. A
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/18/2008 for the course HCMG 101 taught by Professor Harrington during the Spring '08 term at UPenn.

Page1 / 11

Chernew%20et%20al_Increased%20Spending_Health%20Affairs -...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online