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The Potential Effects of Coronavirus on National Health Expenditures

Educational Objective
To understand the potential affect COVID-19 will have on national health expenditures
1 Credit CME

In late March 2020, the Centers for Medicare & Medicaid Services (CMS) released projections of US national health spending that predicted growth from the 2019 level of 17.8% of gross domestic product (GDP) to 19.7% over the next 10 years.1 Through no fault of their own, the CMS prognosticators are poised to take their place in history beside economist Irving Fischer, who announced that “stock prices have reached what looks like a permanently high plateau” shortly before the market crash of 1929 that marked the start of the Great Depression. The coronavirus disease 2019 (COVID-19) pandemic is likely to result in year-over-year changes in both health care spending and GDP that are without precedent. Because the ratio of these 2 numbers, the share of health care in the GDP, receives so much attention in public policy, it is worth thinking about how large these changes may be, and more importantly, what they mean.

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Article Information

Corresponding Author: Sherry Glied, PhD, Robert F. Wagner Graduate School of Public Service, New York University, 295 Lafayette St, Second Floor, New York, NY 10012 (sherry.glied@nyu.edu).

Published Online: April 27, 2020. doi:10.1001/jama.2020.6644

Conflict of Interest Disclosures: Dr Glied reported receiving fees from and being a director of NeuroRx, a company with an interest in patent 8178489 for aviptadil, which is in a clinical trial for treatment of acute respiratory distress syndrome in COVID-19 patients. Dr Levy reported receiving personal fees from the FAIR Health Academic Advisory Board.

References
1.
Keehan  SP , Cuckler  GA , Poisal  JA ,  et al.  National health expenditure projections, 2019-28: expected rebound in prices drives rising spending growth: national health expenditure projections for the period 2019-2028.   Health Aff. 2020:10-377. doi:10.1377/hlthaff.2020.00094Google Scholar
2.
The Potential National Health Cost Impacts to Consumers, Employers and Insurers Due to the Coronavirus (COVID-19). Covered California website. Published March 22, 2020. Accessed April 11, 2020. https://hbex.coveredca.com/data-research/library/COVID-19-NationalCost-Impacts03-21-20.pdf
3.
FAIR Health Inc. The Projected Economic Impact of the COVID-19 Pandemic on the US Healthcare System. Published March 25, 2020. Accessed April 11, 2020. https://s3.amazonaws.com/media2.fairhealth.org/brief/asset/COVID-19%20-%20The%20Projected%20Economic%20Impact%20of%20the%20COVID-19%20Pandemic%20on%20the%20US%20Healthcare%20System.pdf
4.
Payne  D . Coronavirus is tanking the economy. Kiplinger website. Published April 7, 2020. Accessed April 11, 2020. https://www.kiplinger.com/article/business/T019-C000-S010-gdp-growth-rate-and-forecast.html
6.
Philipson  T . Economic epidemiology and infectious diseases. In: Culyer  AJ , Newhouse  JP , eds.  Handbook of Health Economics. Vol 1. Elsevier; 1761-1799.
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