Swivel Business

Personal Expenditure on Health Care

By Natalie on Jun 29, 2007
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Overall, private health insurance paid for 36% of total personal health expenditures in 2004, the federal government 34%, state and local government 11%, and out-of-pocket payments accounted for 15%. Since 1980, the share of total expenditures paid out-of-pocket declined by 12 percentage points. This decline resulted from an expansion of benefits in both private health insurance plans and in government programs. Despite the decline in the share of health care expenditures paid out-of-pocket, the inflation in health care costs over recent years means that consumers may still have significant out-of-pocket expenditures for their health care. In 2004, 37% of personal health care expenditures were for hospital care, 26% for physician care, 12% for prescription drugs, 7% for nursing home care, and the remaining 18% for other personal health care, including visits to nonphysician medical providers, medical supplies, and other health services. Since 1980, the share of total personal health care expenditures devoted to hospital care has declined by 9 percentage points and the prescription drug expenditure share has doubled, reflecting the shift in health care from inpatient to ambulatory care settings and the increasing contribution of prescription drugs to health care services and spending.