5 charts that show how healthcare spending has fallen

"The creation of modern medicine was both costly and valuable, raising spending (from 4% of GDP to 15%) and longevity (from 47 to 78 years) during the last century (Fogel, 2004). Examination of events over 10–20 years is not sufficient to understand a 'medical transformation' that arose from a demographic transition and industrial revolution that took centuries to unfold, nor to forecast the likely path of spending over the next 50 years," Getzen wrote.

"Rather than comparing health expenditures to monthly, quarterly, or yearly fluctuations in GDP, medical cost increases are better matched with 'smoothed' income," wrote Getzen. "Although business cycles do not change the long-run trend, the distributed lag effects of booms and recessions do tend to create noise and eddies that are frequently misattributed to disease outbreaks, policy shifts, or organizational restructuring, even when these events are mainly concurrent rather than causal."

"Growth accountants decompose spending into components: regular increases in population, inflation, per capita income, and an extra element of “excess” growth” often attributed to technology or tastes," wrote Getzen. "It is 'excess growth' in medical costs that increases the health share of GDP and causes fiscal problems, such as health insurance premiums that persistently rise faster than wages or tax revenues."

"Having isolated excess cost growth as the crucial element, the tremendous surge in health care costs that began in the late 1950s becomes evident," Getzen wrote. "Although costs have been rising rapidly as long as most health policy experts can remember, this was not always the case."

"The federal government played a major role, investing in the future health system by financing construction (Hill-Burton Act of 1948), professional training (Health Professions Educational Assistance Act of 1963), and insurance (Medicare and Medicaid, 1965). Yet the most highly leveraged investment in advancing medical technology may have come through the National Institutes of Health," Getzen wrote. "The shape of the American health system was transformed by these postwar investments."