The U.S. Health Care Landscape
It's no secret the cost of health care in the U.S. is rising, and its relevance in both American daily life and American politics is becoming increasingly apparent. Here, we dive into the data to better visualize the United States health care market, how it affects American families, and how it might behave in the future. The purpose of this article is not to advocate an agenda; it's simply to curate data for public use. To that end, you can find our sources at the bottom.
Health Care Expenditure per Capita (USD)
The United States spends more on health care per capita than any other developed nation by far, shelling out nearly $10,000 per person on average. Of that, $4,860 is public spending, and $5,032. Switzerland was the next highest-spending country, at just over $7,900 per capita. Perhaps the most telling insight from this data is the ratio of private to public spending. American citizens spend nearly as much on health care as the U.S. government does; no other country comes close to this split.
Out-of-Pocket Expenses per Capita (USD)
As raw health care costs increase in the United States, per capita out-of-pocket expenses increase as well. In 2009, the average out-of-pocket expense for a U.S. citizen was $957. In 2017, that number had risen to $1,120, an increase of 17%. The Centers for Medicare and Medicaid Services (CMS) note that high prescription drug costs contribute to high out-of-pocket medical expenses.
Health Care Spending & Spending Projections by Enrollee Type (USD)
The data above outlines health care spending by enrollee type (marketplace, employer, Medicaid, and Medicare enrollees). The most notable takeaway from this data is the 2025 projections, which help visualize just how quickly health care costs are increasing and the possible impact on consumers in the not-so-distant future (2025).
Cost of a Vaginal Birth (USD)
Although more anecdotal (since it only covers one medical procedure and lists the most expensive cities), the costs of vaginal births in the United States may be a good representation of the costs of procedures in general. Data from Castlight Health show that in Kansas City, MO, mothers giving birth incur a minimum cost of $3,383, a maximum cost of $11,448, and an average cost of $6,075. Sacramento, CA tops the list with a minimum cost of $4,560, a maximum cost of $24,549, and an average cost of $15,420. Health.com notes the cost of a typical birth in the U.S. ($10,808) is less than Kate Middleton's royal birth expenses of $8,900.
Health Spending as a % of U.S. GDP
Earnst & Young published a study in 2001 that projected American health care spending into 2050. Admittedly slightly dated, the projections are still staggering, showing a near doubling of expenditures from 18% of the national GDP in 2009 to 37% in 2050. For additional context, a study published in Public Affairs in 2013 reported health care expenditure was 16%.
The American Medical Debt Landscape
As health care costs increase, Americans become increasingly likely to incur medical debt. And it's not just the uninsured; U.S. citizens are having trouble paying bills, in some cases even going bankrupt, despite having health insurance. Here's a bird's-eye view of the numbers.
According to a survey conducted in 2007, over 70 million Americans were in debt due to medical expenses. A 2014 survey found that 20% of U.S. citizens with credit reports had medical debt, amounting to around 42.9 million people. Of those, about 60% had medical insurance. Another two million reported bankruptcy, with over 800,000 cases per year.
% of Americans Reporting Trouble Paying Medical Bills
In a 2016 survey by the Kaiser Family Foundation (The Burden of Medical Debt), 26% of participants reported trouble paying medical bills. Of these participants, 20% were insured, and over half had no insurance at all. People with lower incomes tended to be more likely to have trouble with bills, as did people who opted for high-deductible private insurance (as opposed to those with low-deductible insurance) and people with disabilities (as opposed to those without).
% of Debt Due to Medical Bills
The Kaiser Family Foundation also surveyed debt holders to determine how much of their total debt was medical. 22% reported nearly all their debt was medical; this number jumped to 34% for uninsured people and dropped to 17% for those insured. About 26% of people said none of their debt was medical (30% uninsured and 19% insured).
Insurance Status of Americans Having Trouble Paying Medical Debt
Based on data from the same Kaiser Family Foundation survey, the largest group of those who reported difficulty paying medical bills already had employer insurance, making up 39%. Combined with other insured groups (those with public coverage, 16%, and those with privately purchased insurance, 7%), the total portion of insured people having trouble with bills amounted to 62%. Uninsured people accounted for 34% of respondents.
How People Alter Behavior to Pay Medical Bills
A large chunk of people tackle their medical debt by taking what they classify as "major" action or by making significant life changes. According to the Kaiser Family Foundation, 77% of insured people and 64% of uninsured people put off vacations. Another 75% of insured people and 62% of uninsured people cut back on food, and 63% (insured) and 51% (uninsured) spent all or most of their savings to pay debt. Insured people were more likely to delay or cut back on spending, but they were also more likely to take on more credit card debt or pull money out of long-term accounts, like retirement accounts or college funds. Uninsured people were more likely to alter their living situation or seek help from charitable organizations.
Which is Bigger? Emergency Savings vs. Medical Debt
Bankrate published a survey in 2014 that asked people to compare their emergency savings to their medical debt. 51% of people reported that their emergency savings were more substantial than their medical debt, while 25% of people said their medical debt was bigger than their savings. If this seems encouraging, it's important to remember this is not a survey of people who had trouble paying bills; it's presumably a diverse and general sample, which could imply that 25% of people in general have medical debt that outpaces their savings.
American Attitudes Toward Medical Debt
Rising health care costs and medical debt certainly affect the financial lives of U.S. families. With that, of course, comes psychological affect. What exactly is that effect? And how do the concerns Americans have about medical debt stack up against other worries, such as personal finances and the U.S. political climate? Here's the data.
Top Financial Worries of Americans
In LIMRA's 2017 Insurance Barometer study, medical debt ranked among the top financial concerns for Americans. The top three financial concerns were health care related: medical expenses (34%), long-term care expenses (35%), and support if they were disabled (37%). Still, the most common financial concern for Americans was still retirement, with 42% listing retirement savings as a strong concern and 20% listing it as their top concern. It's also worth noting that 13% of respondents said monthly expenses were their top concern, which was higher than all medical categories (not combined).
Largest Anticipated Expenses for Seniors
Compared to other expenses, senior citizens in the United States expect to spend more money on medical expenses than anything else by quite a margin. The BMO Wealth Institute published a study in 2014 that found 84% of respondents reported medical expenses constituted the greatest financial burden, beating out food/clothing (58%), and housing (49%). It's also worth noting that 44% said long-term care was their biggest expense.
Health Care vs. Other Problems Facing the U.S.
Although health care, and thus, medical debt, is among the top financial concerns for Americans -- and while it ranks highly among what Americans feel are the most pressing non-economic problems facing the United Sates -- it does not rank as the most important issue. Of respondents in a 2018 Gallup pole, 7% listed health care as the most important issue. More people listed racism (8%), immigration (15%), and overall dissatisfaction with the government (22%) as the most important issues.
- Health at a Glance, OECD, 2017
- Centers for Medicare and Medicaid Services, National Health Expenditure Data (Projected), 2018
- California Health Care Almanac, California Health Care Foundation, 2017
- Costliest Babies: The State of Maternity Care, Castlight Health, 2016
- "Kate Middleton's Luxury Hospital Stay Costs Less Than a Typical Birth in America," Health.com, 2018
- Global Biotechnology Report 2011, Earnst & Young, 2011
- "Consumers face rising medical debt: survey," Reuters, 2007
- Medical Bankruptcy and the Economy, The Balance, 2018
- "[...] Health Costs Remain a Concern for Many Americans", Health System Tracker, 2016
- The Burden of Medical Debt, Kaiser Family Foundation, 2016
- "Worried about health insurance? That’s common," Bankrate, 2014
- Insurance Barometer Study, LIMRA: Life Happens, 2017
- The Four Keys to Longevity, BMO Wealth Institute, 2014
- Most Important Problem, Gallup, 2018