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What Health Costs Can We Measure?

The fourth type of health statistic measures the economic and societal costs of health care and poor health. Economic costs of health care, like the price of health insurance, factors driving the growth in health care spending, or National Health Expenditure (NHE), are relatively easy to quantify. NHE in 2015 was $3.2 trillion, or $9,990 per person. This accounted for 17.8% of the Gross Domestic Product (GDP) of the U.S. [1]

The Centers for Medicare and Medicaid Services (CMS) publicly report on measures of NHE, including age and gender estimates, as well as health expenditures by state of residence and provider. Additional sources for data on health costs are the National Center for Health Statistics of the Centers for Disease Control and Prevention, and AHRQ’s Medical Expenditure Panel Survey (MEPS).

This pie chart shows examples of different national health expenditures from 2010. All of the items in the chart are examples of measurable health costs.

This pie chart shows United States government spending on health and health care in 2010. Source: Martin A.B., et. al.] [2]

Societal costs of health care and poor health are challenging to quantify, yet still measurable. An example is the cost of reduced quality of life.  The Centers for Disease Control and Prevention (CDC) uses a measure called Health Related Quality of Life (HRQOL) to understand “an individual’s or group’s perceived physical and mental health over time”[3] through an array of questions called “Healthy Days Measures” about health status and limitations. These questions comprise the Healthy Days Survey.  While many of the measures in the HRQOL index are objective outcomes related to physical health, others are more challenging to measure, like social relationships and spirituality.

Health care spending in the U.S. is much greater than other countries.[4] Health care cost and quality have long been used to assess the efficiency of a health care system in decision making that must balance the cost of healthcare with its potential benefits[5]. However, evidence about the relationship between health care cost and quality is inconsistent, with many studies asserting that costs are not closely related with quality health care in the U.S.[6] Increasingly, health care is shifting focus from the volume of services delivered to the value created for patients, with “value” defined as the outcomes achieved relative to the costs.[7]  Value-based care and value-based payment models rely on consistent measures of patient outcomes.


[1] “Historical: National Healthcare Expenditure Data. Centers for Medicare and Medicaid Services (CMS), n.d. Web 1/24/2017.
[2] Growth in US health spending remained slow in 2010; health share of gross domestic product was unchanged from 2009. Health Affairs. 2012 Jan;31(1):208-19.
[3] Centers for Disease Control and Prevention. Measuring healthy days: Population assessment of health-related quality of life. Centers for Disease Control and Prevention, Atlanta, Georgia, 2000.
[4]Betsy Bradly, British medical journal, health affairs, state spending: US spends more, social services.
[5]Ryan, A.M., and C.P. Tompkins. Efficiency and Value in Healthcare: Linking Cost and Quality Measures. A Paper Commissioned by the National Quality Forum, 2014.
[6]Burke, L.A., and A.M. Ryan The Complex Relationship between Cost and Quality in US Health Care. AMA Journal of Ethics, 16(2), 124-130. 2014.
[7] Porter, M.E., Larsson, S., and T.H. Lee. Standardizing Patient Outcomes Measurement. New England Journal of Medicine, 374. 504-506. 2016.


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