Hover over the graphic to see how rising prices, unnecessary services, and lifestyle considerations impact increasing health care costs for consumers.
More information can be found on our cost drivers resources page.
Contrary to popular belief, lifestyle considerations, like smoking and obesity, are not major drivers in health care spending, compared to rising prices and over-utilization of services. That said, addressing the underlying causes of preventable chronic diseases would save money and lead to better quality of life.
Strong evidence reveals that chronic conditions account for a large share of U.S. health spending; however, the prevalence of chronic disease, while growing, accounts for only 25% of overall growth in spending for patients with chronic conditions. Most of the spending increase is accounted for by the rising prices for the services associated with treating chronic conditions. Learn more!
Obesity and related diseases increase both the level and growth of health care spending, and many researchers speculate that obesity rates will continue to climb. Learn more!
While tobacco-related health care costs run in the billions, smoking is not a major cost driver due to lower rates of smoking than other developed countries and slow growth rates of spending on treatment of respiratory conditions compared to GDP.
The Institutes of Medicine identified unnecessary services (e.g., duplicative tests), inefficient care delivery (e.g., test results not shared), and prevention failures (e.g., missed flu shot) as examples of waste in our health care system.
Experts estimate that 15-30% of our health care spending is “wasteful,” but progress has been slow on how to eliminate waste without negatively impacting consumers’ health. Learn more!
Our nation doesn't do a good job of tallying the total cost of medical harm. However, the limited resources devoted to prevention are dwarfed by the resources spent to treat the consequences of this mostly preventable problem. Learn more!
Spending more per unit of health care is the major reason U.S. spending increases every year — not increases in the services we get. A major reason for rising prices is market power that enables providers, drug manufacturers and others to charge prices substantially above cost. Learn more!
Most researchers believe that hospital consolidation leads to higher prices and only minimal gains in efficiencies. Some potential benefits include streamlined administrative functions, clinical integration, higher quality care and better health outcomes. Learn more!
While many medical advances produce better results, some are more expensive without providing a net benefit to patients. For reasons of marketplace positioning, successful marketing or other reasons, we sometimes see adoption of technological advancements before the cost-benefit of these technologies is known. Learn more!
Prescription drug costs currently account for 11% of overall health spending, but the period of low drug spending growth is coming to an end due to increased spending on prescription drugs and the diminishing cost-saving impact of generic drugs. Learn more!
The question isn't "weather" we address health care costs, but when!
For decades, health care costs have risen at rates that outpace the general rate of inflation. Quality is uneven and an estimated 30% of our spending is considered unnecessary. These cost and value issues have a profound impact on the health and financial security of American families.