Landscape of Health Systems in the United States

Despite the prevalence of vertical integration, data and research focused on identifying and describing health systems are sparse. Until recently, we lacked an enumeration of health systems and an understanding of how systems vary by key structural attributes. To fill this gap, the Agency for Healthcare Research and Quality developed the Compendium of U.S. Health Systems, a data resource to support research on comparative health system performance. In this article, we describe the methods used to create the Compendium and present a picture of vertical integration in the United States. We identified 626 health systems in 2016, which accounted for 70% of nonfederal general acute care hospitals. These systems varied by key structural attributes, including size, ownership, and geographic presence. The Compendium can be used to study the characteristics of the U.S. health care system and address policy issues related to provider organizations

The Value of Life and the Rise in Health Spending

Over the past half century, Americans spent a rising share of total economic resources on health and enjoyed substantially longer lives as a result. Debate on health policy often focuses on limiting the growth of health spending. We investigate an issue central to this debate: Is the growth of health spending a rational response to changing economic conditions-notably the growth of income per person? We develop a model based on standard economic assumptions and argue that this is indeed the case. Standard preferences-of the kind used widely in economics to study consumption, asset pricing, and labor supply-imply that health spending is a superior good with an income elasticity well above one. As people get richer and consumption rises, the marginal utility of consumption falls rapidly. Spending on health to extend life allows individuals to purchase additional periods of utility. The marginal utility of life extension does not decline. As a result, the optimal composition of total spending shifts toward health, and the health share grows along with income. In projections based on the quantitative analysis of our model, the optimal health share of spending seems likely to exceed 30 percent by the middle of the century. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.