Which Medical Conditions Account for the Rise in Health Care Spending?

We calculate the level and growth in health care spending attributable to the fifteen most expensive medical conditions in 1987 and 2000. Growth in spending by medical condition is decomposed into changes attributable to rising cost per treated case, treated prevalence, and population growth. We find that a small number of conditions account for most of the growth in health care spending--the top five medical conditions accounted for 31 percent. For four of the conditions, a rise in treated prevalence, rather than rising treatment costs per case or population growth, accounted for most of the spending growth.