Abstract

Virtually all Americans are part of the health care system. They may be patients, health professionals, employers providing benefits, insurers, medical manufacturers, regulators, innovators, or investors. Each has a stake in this burgeoning sector of the United States economy, and each may be critically affected, in multiple and diverse ways, by changes to the system under health reform. As health care expenditures continue to rise, it is increasingly important to understand where these expenditures go and the factors that drive these cost increases. This article examines health care expenditure patterns, considering both the “usual suspects” that frequently are cited as spending drivers, as well as certain significant dynamics that may be the main contributors to rising costs. We conclude that in order to successfully contain costs, health reform will need to address these underlying factors.