This paper presents projections of national health expenditures by type of expenditure and sources of funds for 1980, 1985, and 1990. A major purpose of these projections is to provide a baseline for health care expenditures in the absence of national health insurance and cost containment.

Rapid growth in health expenditures is projected to continue to 1990. National health expenditures increased 350 percent between 1965 and 1978, reaching $192 billion in 1978. They are projected to reach $245 billion in 1980, $440 billion in 1985 and $760 billion in 1990, under current legislation. As a proportion of the Gross National Product (GNP), health expenditures rose from 6.2 percent to 9.1 percent between 1965 and 1978. They are projected to continue to rise, reaching 10.5 percent by 1985 and 11.5 percent by 1990.

Sources of payments for these expenditures are also shifting. From 1965 to 1978, the percentage of total health expenditures that was government financed increased 16 percentage points, from 25 to 41 percent. The Federal share of public funds during the same period grew rapidly, from 53 percent in 1965 to 69 percent in 1978. In 1985, approximately 42 percent of total health spending is projected to be financed from public funds, of which 72 percent will be paid by the Federal government. Public funds are expected to account for 43 percent of total national health expenditures by 1990.

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Projections of national health expenditures, 1980, 1985, and 1990.

This paper presents projections of national health expenditures by type of expenditure and source of funds for 1981, 1985, and 1990. Rapid growth in national health expenditures is projected to continue through 1990. National health expenditures increased 400 percent between 1965 and 1979, reaching $212 billion in 1979. As a proportion of the Gross National Product (GNP), health expenditures rose from 6.1 percent to 9.0 percent between 1965 and 1979. They are expected to continue to rise, reaching 10.8 percent by 1990. This study projects that, under current legislation, national health expenditures will research $279 billion in 1981, $462 billion in 1985, and $821 billion in 1990. Sources of payments for these expenditures are shifting. From 1965 to 1979, the percentage of total health expenditures financed by public funds increased 17 percentage points--from 26 to 43 percent. The Federal share of public funds during this same period grew rapidly, from 51 percent in 1965 to 67 percent in 1979. This study projects that in 1985 approximately 45 percent of total health spending will be financed from public funds, of which 68 percent will be paid for by the Federal government. Public funds will account for 46 percent of total national health expenditure by 1990.

National health expenditures: short-term outlook and long-term projections.

*Based on material presented in Flood, A. B. and Scott, W. R. Hospital Structure and Performance. Baltimore: Johns Hopkins University Press, forthcoming. †Professor, Department of Sociology, Stanford University, Stanford, Calif. ‡Assistant Professor, Department of Sociology and College of Medicine, University of Illinois, Urbana, III. Over the past three decades, the cost of care in hospitals has continued to rise, regularly outstripping the general cost-of-living indices. But during this period, factors contributing to the increase have changed: factors prominent in the 1960s are less significant in the 1980s, and new factors have been introduced. Moreover, because of the increased salience of the topic, many more studies of hospital costs have been conducted recently than earlier in the period under review, and the later studies have employed larger samples and more sophisticated methods although they have not always produced better data. Most observers would agree that the quality of hospital care has also increased over the same three decades, but by no means at a rate commensurate with increases in costs. While quality itself may not have improved dramatically, there has been considerable progress in its conceptualization and measurement. A number of studies assessing hospital factors related to quality of care have been carried out, but much more research attention has been devoted to

Costs and quality of hospital care: a review of the literature.

Using the Commission on Professional and Hospital Activities' Resource Need Index as a measure of casemix complexity, this paper examines the relative contributions of teaching commitment and other hospital characteristics, hospital service and insurer distributions, and area characteristics to variations in casemix complexity. The empirical estimates indicate that all three types of independent variables have a substantial influence. These results are discussed in light of recent casemix research as well as current policy implications.

Determinants of hospital casemix complexity.

Developing a client-focused allocation statistic of inpatient nursing resource use: An alternative to the patient day☆

This article outlines a broad theoretical approach to measuring real cost-per-case differences resulting from differences in case mix, service intensity, and input productivity. Modifying the method in the interests of accommodating current lack of access to hospital data pertaining to diagnostic case mix, the authors apply the method to data from three Connecticut hospitals for the 1960-69 period and find both nominal and real changes in cost per case due to changes in factor input prices, gross service intensity, and factor input productivity.

Measurement of hospital cost variation: case mix, service intensity, and input productivity factors.

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Measurement of hospital cost variation: case mix, service intensity, and input productivity factors.