Ewe Reinhardt is one of our leading healthcare economists and he has good news. Spending on healthcare in the US has been growing at around 7% per year. The growth rate slowed to 3.9% in 2010. Hopefully, this will continue. Healthcare price inflation is the greatest threat to government budget deficits in the long run. He also provides data on the trend in healthcare spending. Spending prior to 1970 was negligible compared to current spending. Payments made by various sources to healthcare providers has made it one of the fastest growing industries in the US. His graphs also show the contribution by each source to healthcare providers. The government share includes Medicare, Medicaid and other sources such as military spending.
We still have a way to go, however, healthcare spending per capita in the US is twice as much as any other nation in the world. It is not an efficient system, but it would be painful to healthcare providers if it were made more efficient. That is one of the reasons why reform is so difficult in the US.
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