ABSTRACT
Healthcare expenditures have been high and increasing rapidly for decades. Why is this issue so particularly important, urgent, and ominous now? Healthcare spending has increased substantially over the past four decades. Americans spent an average of $984 inflation-adjusted dollars (per capita) on healthcare in 1960, and they spent six times that amount in 2004. During these years, healthcare expenditures also increased as a proportion of gross domestic product (GDP), from 5% to 16%. More importantly, healthcare expenditures have been increasing faster than inflation, as detailed in Table 2.1.
