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

09/01/2007

Anecdotal evidence suggests that rising health care costs have a negative effect on the U.S. economy. However, there are no empirically rigorous studies that have examined the causal impact of health care cost growth on aggregate economic outcomes. Studies that examine the association between per capita income or GDP and health care costs almost always find a positive relationship. This is possibly because economic growth is accompanied by a rising share of health care in GDP. While some economists believe that rising health care costs could improve health and consequently improve labor productivity, empirical evidence in favor of this view is limited.

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