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Health Affairs, Vol 14, Issue 2, 68-82
Copyright © 1995 by Project HOPE

Journal Article

When does curbing health costs really help the economy?

Growth in U.S. health spending has historically been associated with growth in prices paid to health care inputs in excess of economywide inflation and to increases in the employment of health inputs. Increases in input prices largely result in transfers from some citizens to others, while increases in employment mean less of other outputs--which is harmful if those other outputs are more valuable than medical services. Price increases are shown to account for 25 to 50 percent of U.S. medical spending growth in recent years.

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