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Rising prices, larger population major causes of increase in healthcare spending

The cost of healthcare in the United States has increased by nearly $1 trillion during the last 20 years.

By HealthDay News
Rising prices, larger population major causes of increase in healthcare spending
Rising prices are the main culprit for the $1 trillion increase in healthcare spending in the United States during the last two decades, researchers say. Photo by Valeri Potapova/Shutterstock

WEDNESDAY, Nov. 8, 2017 -- Rising prices, along with increased variety and complexity of services, are major reasons why healthcare spending in the United States has increased by nearly $1 trillion in the past 20 years, a new study finds.

"Part of the reason we spend more on healthcare each year is the nation's growing and aging population," said study author Joseph Dieleman. He's an assistant professor at the University of Washington's Institute for Health Metrics and Evaluation.

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"But factors relating to the health system -- such as increased price, intensity and utilization -- are driving most of the spending increase," he added.

"When we added up all the health conditions, increasing population size led to a 23 percent increase in healthcare spending," Dieleman said in a university news release.

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"People getting older led to a 12 percent increase in spending, and increases in price and service intensity -- that is the variety and complexity of services -- led to a 50 percent increase in spending," Dieleman noted.

Healthcare spending on outpatient care rose 85 percent between 1996 and 2013, largely due to increasing use of services, the study found. Spending on inpatient care grew 59 percent because of increases in price and service intensity.

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The study was published Nov. 7 in the Journal of the American Medical Association.

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"This research confirms several trends that we've long suspected," Jay Want, executive director of the Peterson Center on Healthcare, which funded the study. "Increased healthcare spending is driven more by how care is priced and delivered to patients than by the population's size or age.

"Americans deserve high-quality care at a reasonable cost, and if done well, we can reverse these trends and have a healthier population," Want said.

More information

RELATED Report: Half of U.S. medical care delivered at emergency rooms

The Kaiser Family Foundation has more on health costs.

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