Background Information (excerpts from the Bureau of Labor Statistics are indented):
The Consumer Expenditure Surveys (CE) are a pair of nationwide household surveys conducted by the US Bureau of Labor Statistics (BLS) to find out how consumers in the United States spend their money…The CE consists of two surveys, the Interview Survey and the Diary Survey... Together, the data from the two surveys cover the complete range of consumers' expenditures. CE data are collected for BLS by the U.S. Census Bureau.
Participating consumers provide expenditure data on their “collection unit” (CU).
Most CUs consist of persons who are related by blood, marriage, or adoption. However, CUs may also consist of individuals living with others but are financially independent, or persons living together and making joint financial decisions.
Each CU has a “reference person”.
The reference person is identified as the first CU member mentioned by the respondent, who is considered to either own or rent the home. It is with respect to this person that the relationship of the other CU members is determined.
The CE includes questions on out-of-pocket healthcare expenses, specifically what the consumer pays for health insurance, medical services, drugs, and medical supplies. It turns out that these healthcare expenses have been relatively stable over the last 40 years, at least as a percent of per capita GDP.
The same holds when looking at healthcare expenses as a percent of after-tax income (both federal and state, which the CE didn’t have good info on until the last 10 years).
But consumer expenditures on healthcare are a relatively small part of overall healthcare spending in the US, which has more than tripled on a per capita basis over the past 50 years:
What this data tells me is that one reason healthcare spending is out of control in the US is that the cost of healthcare isn’t being borne by the ultimate consumer - patients - but by third parties, mainly insurers, employers, and the federal government. And these third parties are less sensitive to price than individuals and households (for various reasons, including ability to pay, lack of market power, and an artificial shortage of healthcare providers). Of course, making consumers pay more for their healthcare would lead some to avoid necessary care.
However, there is a way for consumers to have more influence on the cost of healthcare services without jeopardizing their health: offer them financial incentives to choose less pricey providers, such as elimination of co-pays. That would create price pressure on the demand side, leading to greater efficiency and less waste on the supply side. Which adds up to lower prices, or at least a slower rise in prices.