The graph above illustrates the real per capita national healthcare spending in the United States from 2012 to 2025. The following graph illustrates the second derivative (acceleration) of national per capita healthcare spending over the same period:
A lot of things might be said about that and people do. It has something for everyone. Defenders of the Affordable Care Act point to the moderation in percentage growth rates between 2014 and 2019 compared to historical pre-2010 averages, arguing the law bent the cost curve. Others say there has been an uninterrupted rise in total and real per capita dollars ($11,135 in 2012 to $12,743 in 2019 in constant 2024 dollars) and that the law did not reduce costs. Supporters of the first Trump administration highlight the flat second derivative and modest real growth from 2017 to 2019 (averaging roughly 1.6% annual real growth before COVID-19). Critics point to the massive 2020 spending spike (+$1,140 real per capita in a single year) during the pandemic response. Supporters of the Biden administration emphasize the temporary real per capita decline in 2021 and 2022 (dropping from $13,883 to $13,393 in constant 2024 dollars) as economy-wide inflation outpaced medical price growth, alongside expanded coverage. Critics point to the 2023–2024 re-acceleration (reaching $15,474 per capita) and the steep rise in nominal spending.
What cannot reasonably be said are that healthcare spending is declining or that there has been a durable reduction in spending. Even when the second derivative turned negative, that did not necessarily mean spending was declining. Indeed, real per capita spending increased in most years, and the declines in 2021 and 2022 proved temporary.
I always refer to the period before the ACA passed and the period after it passed. For me the much more important number is spending as a percent of GDP. So if you look at those numbers and look at pre and post ACA you see a flattening of the curve. If you look at what was expected by every organization that tracks health care costs they all expected a faster increase than we saw, expecting IIRC health care costs at about 20% of GDP by now. At some point we will see some crowding out effects, maybe even some now.
in 2010 we spent 17.2% of GDP on health care, in 2022 17.6%, in 2023 17.7% and in 2024 18%. Going back to 1970, about the start of modern health care, we spent 6.9%. During that 54 year period you cant find another period of such extended slow growth, even including 2024. Closest you can get is the 1993-2000 stretch with essentially no growth, but that is bracketed by rapid growth on either side.
To be clear I dont think I ever said, certainly didnt mean to say, that costs decreased.
https://www.healthsystemtracker.org/chart-collection/u-s-spending-healthcare-changed-time/#Total%20national%20health%20expenditures,%20US%20$%20per%20capita,%201970-2024
Steve
1970 marks the beginning of the Great Society and the federal welfare system. Prior to that there was some private insurance and some modest work related programs, but many people had only an intermittent relation with medicine. My union pipefitter father in liberal Boston did not have health insurance (other than VA) either for himself or his family. Doctor visits were rare and only for serious injuries.
My point being that most people in the US did not have access to regular medical care. I suppose to a geezer like me (83 yo) who grew up in a very different country and economy, it seems obvious that some sort of federal welfare system, with medical benefits was needed. One can argue about today’s costs, but one has to recognize the need.
The Baby Boomers are starting to die off. We probably should expect a gradual lessening of total health expenditures and a fairly large reduction in housing costs.