US Healthcare Expenditure Expected to Far Outpace GDP

Monday 3 September 2012, Amsterdam

Although already the world’s number one healthcare spender in terms of percentage of Gross Domestic Product (GDP) and per capita, US health expenditure is set to grow to unprecedented levels following the implementation of the recently passed Affordable Care Act (ACA).

The business intelligence firm’s latest study says that the United States spent $8,300 per person on healthcare in 2010, but is expected to outlay as much as $12,500 for each citizen by 2020.

Growth in healthcare expenditure is expected to be modest until 2014, when the addition of 19.6 million people to the Medicare program is expected to increase Medicaid spending by 18% and private sector spending by 7.9%.

A study conducted by the Congressional Budget Office (CBO) in the US estimated that the government could spend more than $1.8 trillion a year on Medicare and Medicaid by the end of the decade, climbing from the $1.1 trillion allocated for 2012.

However, while the richest country in the world’s healthcare system continues to expand, it is emerging nations such as China, India and Brazil that will exhibit the most substantial growth as these governments aim to make basic healthcare more affordable to a wider demographic.

Unlike these developing nations and the US, healthcare spending in the European Union (EU) has fallen consistently since the economic downturn of 2008, with the UK, Italy and Spain cutting back at Compound Annual Growth Rates (CAGRs) of -4%, -3.3% and -4%, respectively during the period 2008-2010.