What's the effect of the dominance of private ​health insurance industry on the personal h​ealthcare expenditures in the U.S,.?

A data-viz by Yuxiang Cheng

Why does it matter, then?

“NHE (national health expenditure) grew 2.7% to $4.3 trillion in 2021, or $12,914 ​per person, and accounted for 18.3% of Gross Domestic Product (GDP).”


“Over 2022-2031 average growth in NHE (5.4 percent) is projected to outpace ​that of average GDP growth (4.6 percent) resulting in an increase in the health ​spending share of GDP from 18.3 percent in 2021 to 19.6 percent in 2031.”

-----U.S. Centers for Medicare & Medicaid Services

Estimated NHE Share

in U.S. GDP in 2031

When the growth of NHE outpacing ​that of the GDP, its effect will be ​pronounced to individuals as the ​portion of healthcare spending would ​rise

“In 2021, private health insurance coverage continued to be more prevalent than ​public coverage, at 66.0 percent and 35.7 percent, respectively.”

-----U.S. Census Bureau


What is it like in other parts of the world?

Public Health Insurance Coverage across OECD countries from 2016 to 2020

(% of the total population)

The bar chart offers us two most noticeable informations: the first is that most of the OECD countries ​aims to have a universal public health system of some kind since most of the OECD countries have ​100% public health insurance coverage. The second is that USA is an outliner with vast majority of its ​population not covered by public healthcare system.

How is the public health coverage connected to the personal ​health spending?

Public Health Insurance Coverage (% of the total population) versus Household ​Out-of-Pocket Payments (per capita, current prices, current PPPs) across ​OECD countries from 2015 to 2022

From this graph, there are two noticeable patterns among the OECD countries (except for the outliner). ​The first pattern appears to belong to the developed world (in Western Europe and Asia) having mostly ​100% of public health coverage but the out-of-pocket payment is quite high. The second pattern appears ​to belong to the developing regions (in Eastern Europe and South America), with less stable public ​health coverage that still mostly (vastly) above 60% but the out-of-pocket payment is lower.

Back to our outliner, why is it like this?

National Health Expenditures of U.S., Out of Pocket from 1960 to 2021 ​(comparing to the curve of Inflation Rate)

The out-of-pocket NHE of the U.S. have been growing in mostly exponential rate from, which, as shown ​in the first line chart is mostly independent from the inflation rate.

National Health Expenditures on Private Health Insurance of the U.S. from ​1960 to 2021 (comparing to the curve of Out-of-Pocket NHE)

At the level of personal everyday spendings, the out-of-pocket payment for healthcare should be ​negatively correlated to the spending on insurance. What’s shown in the second line chart shown is that ​the growth of the NHE on Private health insurance is even faster, even more exponential than the curve ​of out-of-pocket NHE. It’s more so in the 21th century since the growth rate increased drastically.


Conclusion, and what’s more

The formation of all healthcare systems depends on complex social-economic structures. There’s no ​simple answer to it. The sets of data presented outline the issue and its dimensions.

  • The dominance of private health insurance in a society is a rare phenomenon.
  • Many countries aims to achieve a high coverage of public health insurance, but the out-of-pocket ​expenditures varies depending on the cost of medical resources and purchasing power in specific ​countries.
  • The U.S. national expenditures on private health insurance grows faster than the out-of-pocket ​National Health Expenditures.

Other than the comparison between private and public insurance, it’s also necessary to further ​investigate the interconnections of the hospital, insurance, and pharmacy.