The challenges facing the healthcare sector in the US are numerous. The US lags behind other developed nations on many key health metrics, including life expectancy, chronic disease burden and preventable deaths. The population has aged on average as the baby boomers age, leading to increased demand for healthcare services. Longstanding public health challenges such as obesity, substance abuse and mental illness have far-reaching implications for the overall health and well-being of Americans. And in recent years, the COVID-19 pandemic has placed an unusual strain on healthcare providers and hospitals.
With these many interlocking and compounding challenges, the US is spending heavily to support the healthcare system. According to federal data, national healthcare spending in the US is $4.1 trillion per year, which accounts for nearly 20% of the nation’s GDP. The bulk of this spending comes from the federal government, which contributes 36.3% of spending, and US households, which account for 26.1%.
In discussions about the US health care system, the role of state and local governments is often underestimated. States and localities often fund public hospitals, health inspections, mental health and substance abuse programs, water and air quality programs, and payments to private hospitals for public health services. State and local governments funded 14.3% of total national healthcare spending in 2020.
These expenses are one of the most important budgetary tasks of the federal states and local authorities. Health and hospitals represent the third largest spending category for state and local governments, behind only public welfare and primary and secondary education. Together, governments spend $345 billion on health and hospitals each year, which is nearly 10% of all state and local spending.
State and local spending on health and hospitals on a per capita basis has also increased over time. In 2000, state and local governments spent $678 per capita on health care and hospitals, adjusted for inflation. By 2020, that number had grown to $1,040 — an increase of more than 50%.
However, this trend did not have the same effect at all locations. In fact, 13 states have seen per capita declines in health and hospital spending over the past decade, led by Arizona, where spending has fallen by more than 50%. In contrast, other states have seen rapid growth in healthcare spending. Vermont’s inflation-adjusted state and local spending per capita more than doubled between 2010 and 2020, from $355 to $730, and Utah’s 96.2% growth rate was not far behind.
Just as healthcare spending trends vary by region, overall spending also varies from state to state. Nationwide, states and localities spend about 9.9% of their budgets on health and hospitals, for a total of $1,047 per capita. But a number of states and localities are spending significantly more, including Wyoming, where spending per capita is nearly three times the national average, and South Carolina, where health and hospital spending accounts for nearly 20% of state and local spending .
The data used in this analysis comes from the US Census Bureau. To determine the states that spend the most on health and hospitals, HowtoHome.com researchers calculated the percentage of health and hospital spending as a percentage of total spending. In the event of a tie, the state with the higher overall health and hospital expenditure per capita was ranked higher.
The analysis found that annual per capita health and hospital spending in Pennsylvania is $879 — 7.7% of the state’s total spending — compared to the national average of $1,047. Here is a summary of the data for Pennsylvania:
- Health and hospital expenditure as a proportion of total expenditure: 7.7%
- Total health and hospital expenditure per capita: $879
- Total health and hospital expenses: $11,241,348,000
- Total direct spend: $145,965,660,000
For reference, here are the stats for the entire United States:
- Health and hospital expenditure as a proportion of total expenditure: 9.9%
- Total health and hospital expenditure per capita: $1,047
- Total health and hospital expenses: $345,008,758,000
- Total direct spend: $3,494,136,935,000
For more information, detailed methodology, and full results, see the original report on HowtoHome.com’s website: https://www.howtohome.com/us-states-that-spend-most-on-health-and-hospitals/