Circulatory conditions had been the largest contributor to health spending, for at least a decade, until 2012 when they were surpassed in total spending by ill-defined conditions (a category including check-ups, follow-up appointments, preventive care, and treatment of minor conditions such as colds, flus, and allergies). In 2012, about $250 billion was spent on ill-defined conditions, and $243 billion went toward the treatment of circulatory conditions.
The top five disease-based spending categories (ill-defined conditions, circulatory, musculoskeletal, respiratory, endocrine, and nervous system conditions) account for roughly half (51%) of all medical services spending by disease category. Circulatory and ill-defined conditions each represent about 13% of overall health spending by disease and musculoskeletal, respiratory, and endocrine conditions represent 10%, 8%, and 7% respectively.
From 2000 – 2012, among the major disease categories in the chart above, the fastest spending growth was on ill-defined conditions and endocrine disorders.
Ill-defined conditions accounted for 16.6% of medical services spending growth. Treatments for musculoskeletal disorders (which include back problems and arthritis) and circulatory diseases were the second and third largest contributors to overall health services spending growth over the 2000 – 2012 period. Together, these three disease areas account for 36% of health services spending growth by disease. While spending on the category of circulatory diseases grew slowest of all disease categories, it still accounts for a substantial portion of overall growth because it is such a large area of spending.
The cost of treating infectious diseases has grown faster than any category (the price index for this category grew at an average annual growth rate of 6.1% from 2000 to 2012).
Price indexes in the Health Care Satellite Account differ from official price indexes in that they are not only influenced by the price of a given treatment, but also by greater treatment intensity per visit, shifts from lower-cost to higher-cost treatments, and movement into less restrictive insurance plans.
The number of treated cases grew fastest for ill-defined conditions and endocrine disorders, each at an average annual growth rate of 4.3% from 2000-2012. (Because the spending changes above adjust for treatment cost, they primarily represent changes in the number of cases over the time period.)
Over the 2000 – 2012 period, the cost per case generally grew faster than the number of treated cases. 2012 was the first time in recent years that the number of treated cases grew faster than the cost per case.
Over the 2000 – 2012 period, about 65% of per capita spending growth can be attributed to growth in the cost per case, with the remaining 35% due to non-price factors. (This estimate differs from that previously released by the BEA because the number of treated cases started to drive growth relatively more in the most recent years.)
Assessing the value of health care spending is challenging for a number of reasons (including limited availability of outcomes data, differences in categorization between data sources, and inability to control for socioeconomic and other external factors that influence health). Disability Adjusted Life Years (DALYs) are one way to measure health outcomes that account for both premature death and years lived with disability. In the 2005 – 2010 period, the increase in per capita spending generally corresponded with an improvement in DALYs. A study done by researchers at the BEA comparing spending and outcomes across 30 chronic conditions from 1987 - 2010 found that “overall gains in health outcomes for the population more than offset the increase in the average cost of treatment, suggesting a positive net value for medical spending.”