Health Affairs

Health Affairs, 22, no. 4 (2003): 15-25 doi: 10.1377/hlthaff.22.4.15 © 2003 by Project HOPE	New Online   Getting Health Reform Done   After the State of the Union   Incremental Reform   E-Health in Developing World   Most-Read Articles in 2009

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Health Spending

Increased Spending On Health Care: How Much Can The United States Afford?

Michael E. Chernew, Richard A. Hirth and David M. Cutler

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 two-percentage-point gap would only be affordable through 2039. In either case, the share of income growth devoted to health care would exceed historical norms. The value of care, which determines willingness to pay, and distributional issues are more important than our ability as a society to pay for care.

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