Healthcare expenditures in the US represent nearly 18% of the gross domestic product (GDP). Many take issue with the level of healthcare spending in this country based on comparisons to other countries.
In the US, healthcare is the second-largest component of the federal budget behind Social Security, representing nearly 30% in FY 2020, and government sources fund 51% of all national healthcare expenditures. Further, the healthcare share of the federal budget is projected to increase significantly as the last wave of baby boomers enroll in Medicare.
One could also take the position that this level of spending is not, in and of itself, a bad thing. The healthcare sector is an economic juggernaut. In addition to providing a clear societal benefit, hospitals, physicians, and other clinical services represented $1.92 trillion in expenditures in 2018, 52.5% of national health expenditures, and 9.3% of GDP. Retail sales of medical products, including prescription medications, represent another $456.3 billion, and 12.5% of national health expenditures. In many communities, hospitals and health systems are among the largest employers. Physicians, other medical providers, and their employees across the continuum make up a significant part of every community’s workforce. The sector added 2.8 million jobs between 2006 and 2016, the most of any industry. The US Bureau of Labor Statistics projects another 18% growth in health sector jobs between 2016 and 2026, and growth in national health expenditures is expected to continue to slightly outpace the general economy, reaching 19.7% of GDP by 2028. That represents a 54% increase in spending over 2018 levels.