The Centers for Medicare & Medicaid Services (CMS) has released the 2024 National Health Expenditure (NHE) report, which shows that US health spending grew 7.2% to $5.3 trillion, accounting for 18.0% of the country’s gross domestic product. This increase has led to concerns that healthcare is too expensive and that prices must be reduced. However, the report suggests that the issue is more complex, and that the increase in spending is largely driven by non-price factors such as higher demand and shifts in the mix of goods and services.<\/p>\n
The concept of the Jevons paradox, which states that improving efficiency can lead to increased consumption, is relevant to understanding the healthcare spending trend. In the 19th century, economist William Stanley Jevons observed that improving the efficiency of coal use led to increased coal consumption, as the lower cost made it more accessible and widely used. Similarly, in healthcare, improvements in efficiency, such as reduced administrative burdens and increased access to care, can lead to increased utilization and spending.<\/p>\n
The CMS report highlights that private health insurance enrollment, Affordable Care Act Marketplace enrollment, and total private health insurance spending all increased, contributing to the growth in healthcare spending. Additionally, Medicare and Medicaid spending also grew, with hospital prices rising 3.4%, the fastest rate since 2007. However, the report notes that high insurance coverage does not necessarily equate to high-quality, high-value care, but it does increase the probability that people will seek care and follow through on care plans.<\/p>\n
The key takeaway from the report is that aggregate spending is not a standalone scorecard, and that the increase in spending can be attributed to two different realities: a system that is becoming wasteful or a system that is removing barriers and meeting previously unmet needs. To understand the true impact of healthcare spending, it is essential to examine the compositional changes in care, such as the types of services being utilized, the quality of care, and the outcomes achieved.<\/p>\n
Innovations that make healthcare easier, such as automation, AI-enabled workflow, and virtual-first access, can have unpredictable fiscal signatures, reducing the cost of an encounter while increasing the number of encounters. Therefore, it is crucial to consider potential outcomes more broadly and carefully before reacting with austerity measures. The Jevons paradox suggests that we should expect utilization to respond to improvements in efficiency, and that spending numbers should be read as a map of shifting demand, rather than a simple verdict on whether the system is “working.” Ultimately, the US healthcare system is exceptionally good at turning access, coverage, and innovation into utilization, and the NHE 2024 release is a reminder that making care easier will lead to increased use.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Centers for Medicare & Medicaid Services (CMS) has released the 2024 National Health Expenditure (NHE) report, which shows that US health spending grew 7.2% to $5.3 trillion, accounting for 18.0% of the country’s gross domestic product. This increase has led to concerns that healthcare is too expensive and that prices must be reduced. However, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"fifu_image_url":"","fifu_image_alt":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[31,22],"tags":[],"class_list":["post-222722","post","type-post","status-publish","format-standard","hentry","category-care","category-insurance"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9ibIB-VWi","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":222711,"url":"https:\/\/smallnews.in\/insurance\/2026\/01\/21\/international-comparison-of-health-systemsthe-performance-of-healthcare-systems-varies-significantly-across-countries-factors-such-as-access-to-care-quality-of-care-and-health-outcomes-are-often-u\/","url_meta":{"origin":222722,"position":0},"title":"International Comparison of Health Systems\nThe performance of healthcare systems varies significantly across countries. Factors such as access to care, quality of care, and health outcomes are often used to compare health systems internationally.\nKey Indicators:\n\nLife Expectancy: Average number of years a person is expected to live.\nInfant Mortality Rate: Number of deaths per 1,000 live births.\nMortality Amenable to Healthcare: Deaths from conditions that are treatable with timely and effective healthcare.\nPatient Satisfaction: Patients’ perceived quality of care and satisfaction with healthcare services.\nHealthcare Spending: Percentage of GDP spent on healthcare.\n\nCountry Comparison:\n\nUnited States:\nHigh healthcare spending (17.1% of GDP)\nAverage life expectancy (78.7 years)\nHigh infant mortality rate (5.8 per 1,000 live births)\n\n\nCanada:\nUniversal healthcare system\nLower healthcare spending (10.4% of GDP)\nHigher life expectancy (81.9 years)\nLower infant mortality rate (4.5 per 1,000 live births)\n\n\nUnited Kingdom:\nNational Health Service (NHS) provides universal coverage\nLower healthcare spending (9.8% of GDP)\nHigher life expectancy (80.7 years)\nLower infant mortality rate (3.9 per 1,000 live births)\n\n\nAustralia:\nMixed public-private healthcare system\nHigher healthcare spending (9.5% of GDP)\nHigher life expectancy (82.5 years)\nLower infant mortality rate (3.2 per 1,000 live births)\n\n\nJapan:\nUniversal healthcare system\nHigh life expectancy (84.7 years)\nLow infant mortality rate (2.1 per 1,000 live births)\nHigh healthcare spending (11.4% of GDP)\n\n\n\nCommon Challenges:\n\nAging Populations: Increasing demand for healthcare services.\nRising Healthcare Costs: Balancing quality and affordability.\nHealth Inequalities: Disparities in access to care and health outcomes.\nWorkforce Shortages: Attracting and retaining healthcare professionals.\n\nBest Practices:\n\nPrimary Care: Emphasizing preventive care and community-based services.\nIntegrated Care: Coordinating care across settings and providers.\nPatient-Centered Care: Focusing on patient needs and preferences.\nInnovative Technologies: Leveraging digital health and data analytics to improve care.","author":"Team Small News","date":"January 21, 2026","format":false,"excerpt":"The United States spends significantly more on healthcare per person compared to other high-income countries. In 2020, the US spent 19.5% of its GDP on healthcare, which is substantially higher than other peer countries. This gap has been widening over the past five decades, with the US spending about 7%\u2026","rel":"","context":"In "Care"","block_context":{"text":"Care","link":"https:\/\/smallnews.in\/insurance\/category\/care\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":222774,"url":"https:\/\/smallnews.in\/insurance\/2026\/02\/09\/the-rising-cost-of-health-care-is-a-complex-issue-with-multiple-contributing-factors-some-of-the-key-reasons-includeadvancements-in-medical-technology-new-treatments-medications-and-equipment\/","url_meta":{"origin":222722,"position":1},"title":"The rising cost of health care is a complex issue with multiple contributing factors. Some of the key reasons include:\n\n\nAdvancements in Medical Technology: New treatments, medications, and equipment are continually being developed, which can drive up costs. These advancements often come with a high price tag, contributing to increased healthcare expenditures.\n\n\nAging Population: As the population ages, there is a greater demand for health care services. Older adults typically require more medical care due to age-related health issues, leading to higher costs.\n\n\nChronic Diseases: The prevalence of chronic diseases such as diabetes, heart disease, and obesity has increased. Managing these conditions often requires ongoing, costly treatments and medications.\n\n\nAdministrative Costs: The healthcare system involves a significant amount of administrative work, including billing, insurance claims, and regulatory compliance. These tasks are costly and contribute to the overall expense of healthcare.\n\n\nPharmaceutical Prices: The cost of prescription medications has risen significantly. New and innovative drugs, especially those for rare or complex conditions, can be very expensive.\n\n\nDefensive Medicine: To avoid potential lawsuits, healthcare providers may order additional tests or procedures, which can drive up costs without necessarily improving patient outcomes.\n\n\nInsurance and Payment Systems: The way healthcare is financed, including insurance premiums, deductibles, and copays, can make it inaccessible or unaffordable for many people, affecting the overall cost landscape.\n\n\nHospital and Healthcare Facility Costs: The cost of maintaining and operating hospitals and other healthcare facilities, including staff salaries, equipment, and supplies, contributes to the overall expense of healthcare.\n\n\nRegulatory Compliance: Healthcare providers must comply with a myriad of regulations, which can be costly in terms of time, personnel, and resources.\n\n\nLack of Transparency and Competition: In some areas, limited competition among healthcare providers and a lack of price transparency can lead to higher costs, as consumers may not be able to make informed decisions based on price and quality.","author":"Team Small News","date":"February 9, 2026","format":false,"excerpt":"The rising cost of health insurance in the United States is a pressing concern, with premiums for employer-sponsored insurance expected to increase by 9% in 2026. Public spending on Medicare, Medicaid, and Obamacare is also surging. However, this increase is not due to excessive profits among insurers or hospitals, but\u2026","rel":"","context":"In "Care"","block_context":{"text":"Care","link":"https:\/\/smallnews.in\/insurance\/category\/care\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":222511,"url":"https:\/\/smallnews.in\/insurance\/2025\/12\/25\/were-stuck-with-health-insurance-but-we-can-improve-it\/","url_meta":{"origin":222722,"position":2},"title":"We’re Stuck With Health Insurance\u2014But We Can Improve It","author":"Team Small News","date":"December 25, 2025","format":false,"excerpt":"The proportion of healthcare services purchased through insurance has increased significantly over the past century, thanks to tax exemptions for employer-sponsored benefits. This has led to a surge in spending on treatment, as consumers are insulated from the cost of services. However, making patients bear more of their costs out\u2026","rel":"","context":"In "Care"","block_context":{"text":"Care","link":"https:\/\/smallnews.in\/insurance\/category\/care\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":222468,"url":"https:\/\/smallnews.in\/insurance\/2025\/12\/21\/the-increasing-expense-of-health-insurance-can-be-attributed-to-several-factors-1-rising-healthcare-costs-as-medical-technologies-advance-and-new-treatments-emerge-the-cost-of-providing-healthca\/","url_meta":{"origin":222722,"position":3},"title":"The increasing expense of health insurance can be attributed to several factors. \n\n1. Rising healthcare costs: As medical technologies advance and new treatments emerge, the cost of providing healthcare services increases. \n2. Aging population: Older adults tend to require more medical care, which drives up costs. \n3. Increased demand for healthcare services: The Affordable Care Act (ACA) has led to more people having health insurance, resulting in higher demand for healthcare services and, subsequently, higher costs. \n4. Pharmaceutical costs: The development and production of new, often expensive, medications contribute to rising healthcare costs. \n5. Administrative costs: The complexity of the healthcare system and the need for administrative staff to manage insurance claims, billing, and other tasks add to the overall expense. \n6. Profit margins: Insurance companies aim to make a profit, which is factored into the cost of premiums. \n7. Government policies and regulations: Changes in government policies, such as the repeal of the ACA’s individual mandate, can impact the health insurance market and drive up costs. \n8. Provider consolidation: As healthcare providers consolidate, they gain more negotiating power with insurance companies, potentially leading to higher costs. \n9. Lack of transparency: The opacity of healthcare pricing makes it difficult for consumers to make informed decisions, which can contribute to higher costs. \n10. Inefficient payment systems: The current fee-for-service payment model can encourage unnecessary treatments and procedures, driving up costs. \n\nThese factors combined create a complex and often expensive healthcare system, leading to increasing health insurance costs.","author":"Team Small News","date":"December 21, 2025","format":false,"excerpt":"The cost of health insurance is increasing, and several factors are contributing to this trend. According to a report by Axios, the main drivers of rising health insurance costs are: Rising healthcare costs: The cost of medical care is increasing, driven by factors such as an aging population, the growing\u2026","rel":"","context":"In "Care"","block_context":{"text":"Care","link":"https:\/\/smallnews.in\/insurance\/category\/care\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":222683,"url":"https:\/\/smallnews.in\/insurance\/2026\/01\/16\/trump-unveils-great-healthcare-plan-outlines-diverse-set-of-initiatives\/","url_meta":{"origin":222722,"position":4},"title":"Trump Unveils ‘Great Healthcare Plan’, Outlines Diverse Set of Initiatives","author":"Team Small News","date":"January 16, 2026","format":false,"excerpt":"President Trump has unveiled his \"Great Healthcare Plan\", a collection of initiatives aimed at improving the US healthcare system. The plan, announced at a rally in North Carolina, is a grab bag of proposals that include expanding health savings accounts, increasing transparency in medical billing, and lowering prescription drug costs.\u2026","rel":"","context":"In "Care"","block_context":{"text":"Care","link":"https:\/\/smallnews.in\/insurance\/category\/care\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":222579,"url":"https:\/\/smallnews.in\/insurance\/2026\/01\/02\/congress-had-a-viable-health-care-reform-plan-once-it-should-be-considered-again-wyomingnews-com\/","url_meta":{"origin":222722,"position":5},"title":"Congress had a viable health care reform plan once \u2013 it should be considered again – WyomingNews.com","author":"Team Small News","date":"January 2, 2026","format":false,"excerpt":"The article discusses a viable healthcare reform plan that was once considered by Congress, but ultimately not implemented. The plan, known as the \"Medicare-X\" proposal, was introduced in 2019 by a bipartisan group of lawmakers. The proposal aimed to create a public health insurance option, building on the existing Medicare\u2026","rel":"","context":"In "Care"","block_context":{"text":"Care","link":"https:\/\/smallnews.in\/insurance\/category\/care\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/smallnews.in\/insurance\/wp-json\/wp\/v2\/posts\/222722","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/smallnews.in\/insurance\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/smallnews.in\/insurance\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/smallnews.in\/insurance\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/smallnews.in\/insurance\/wp-json\/wp\/v2\/comments?post=222722"}],"version-history":[{"count":0,"href":"https:\/\/smallnews.in\/insurance\/wp-json\/wp\/v2\/posts\/222722\/revisions"}],"wp:attachment":[{"href":"https:\/\/smallnews.in\/insurance\/wp-json\/wp\/v2\/media?parent=222722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/smallnews.in\/insurance\/wp-json\/wp\/v2\/categories?post=222722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/smallnews.in\/insurance\/wp-json\/wp\/v2\/tags?post=222722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}