The Health Sector's Share of the Gross National Product

Abstract

Between 1947 and 1987 expenditures for health care in the United States grew 2.5 percent per annum faster than expenditures for other goods and services. The health sector's share of the gross national product rose from well under 5 percent in the late 1940s to more than 11 percent in the late 1980s. The expenditures gap has two components: health care prices rose 1.6 percent per annum more rapidly than other prices, while the quantity of health care grew 0.9 percent per annum faster than other quantities. Many factors, including wages, productivity, technology, and insurance contributed to these trends. No single explanation suffices, and no simple solution is apparent.