In 1960, the private sector funded more than three quarters of the nation’s health care expenditures. Individuals paid nearly one half of total national health care expenditures through out-of-pocket expenditures. Beginning in 1967, the way health care is purchased in the United States began to reverse. This has resulted in a large and growing government “health care wedge” — an economic separation of effort from reward, of consumers (patients) from producers (health care providers) — caused by government policies. Rising government expenditures for health care are the main factor driving the growth of this wedge, which is a primary driver in rising health care costs, i.e., inflation in medical costs. Federal proposals for health care reform currently under consideration would exacerbate these problems, rather than solve them.

Full Policy Study (PDF)

Four-Page Policy Brief (PDF)