The Effect of Health Care Cost Growth on the U.S. Economy

This report presents the findings from an evaluation of the effect of health care cost growth on the U.S. economy. The evaluation consisted of 1) a thorough and systematic review of the existing literature, anecdotal evidence and survey findings, and 2) limited quantitative analyses of available secondary data sources. The results of the quantitative analyses indicate that 1) there is a significant and positive relationship between per capita health expenditure and per capita Gross State Product, 2) rising health care costs had a larger negative effect on employment and output of industries where benefits constitute a higher share of compensation, and 3) there is a significant positive correlation between per capita health expenditure and state government expenditures on health as well as other sectors.