NCPA - National Center for Policy Analysis

Gross Domestic Product: Tame Health Spending in Strong Third Quarter

October 31, 2016

Senior Fellow John R. Graham writes at NCPA's Health blog:

For those (like me) concerned about how much health spending continues to increase after Obamacare, today's flash report of third quarter Gross Domestic Product brings good news. Of course, the flash GDP report is subject to significant revision. Nevertheless, it is good to have a breather from the second quarter, which was dominated by growth in health services spending.

Overall, real GPD increased 2.9 percent on the quarter, while health services spending increased only 2.3 percent, and contributed only 9 percent of real GDP growth. Growth in health services spending was also in line with other services spending and personal consumption expenditures (PCE). Also, the annualized change in the health services price index increased by 1.6 percent, very close to overall GDP.

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