Image of scale explaining that value is a balance of outcomes and costs as part of overall discussion of health reform in the United States.

Has Healthcare Value Improved in the Last 25 Years?

Measuring the value we receive from the U.S. Health system is a tricky but important part of the health reform conversation. If we strip down the complexities there are two questions worth considering:

  • Is the U.S. health system generating better value than in the past?
  • How do factors other than the healthcare system affect health outcomes (compared to other countries)?


As noted in other articles on this site, the United States spends more per citizen than any other country but ranks lower than most on almost all comparative value measures including quality, costs and outcomes.

To examine the issue of “value” the Kaiser Family Foundation developed an approach to measure the level of improvement in health outcomes over time, and the incremental costs incurred by the health system.

This work is part of the Peterson-Kaiser Health System Tracker which includes a “Dashboard” of indicators that can be used to describe, evaluate and compare changes in the value of U.S. healthcare over time. With many measures spanning 25 years, or approximately a generation, the Dashboard paints a picture of how the value of the system has changed over time.

The assessment looks at whether the value of the U.S. health system has improved or worsened from 1991 – 2016 by measuring the level of improvement in health outcomes, and the incremental costs the healthcare system incurred at the same time.

Here is a summary of results:

  • Between 1991 and 2016, life expectancy increased by 3.1 years to 78.6, representing a 4% improvement. In the same time, disease burden (as measured by  something known as the total number of disability adjusted life years, or DALYs) improved by 12%.
  • At the same time, there was a worsening of years living in disability which is largely due to  an increase in substance use disorders. Substance use is actually one of the primary contributors to the decline in life expectancy in 2015 and 2016, the first time life expectancy has dropped two years in a row in several decades. This trend clearly points to the importance of social and environmental determinants being included in the broader debate of health reform.
  • In looking at this data there is a very troubling trend in Women’s Health where outcomes have actually gotten worse.  In the United States maternal mortality has gone up significantly from 14 deaths per 100,000 live births in 1991 to nearly 31 in 2016.  

The good news is that the study shows that health outcomes have generally improved in the U.S. over the past 25 years as measured by life expectancy and disease burden. However, since value is a function of outcomes and costs, one must also take into account the increase in health spending

In 1991, the Gross Domestic Product (GDP) attributable to healthcare was 12.8% or $788 billion. By 2016, healthcare consumed 17.9% of GDP or $3.3 Trillion. This brings us to a key question in how we evaluate value:

  • Is the 4% improvement in life expectancy and 12% reduction in disease burden enough to warrant a 40% increase in GDP consumption over the past 25 years?
  • What does this portend for future access and affordability? This is an especially important issue to address as part of health reform in the United States as we consider a shift in demographics such as increase in elderly population, as well as the impact of other key health challenges such as the Opioid epidemic.

As a comparison to America’s performance as noted above, similar nations during the same period generated an average increase in life expectancy of 5.2 years, or 7%, compared to the U.S.’s 3.1 years, or 4% improvement. In these countries, disease burden improved by 22%, compared to the U.S.’s 12%.

By these indicators, comparable countries spent under two thirds (60%) of what the U.S. spent on healthcare relative to GDP.

Relative to the health reform debate, another interesting finding is that the United States spends less on social services and more on healthcare,  but has worse health outcomes than similar countries.

And so, to summarize the question of whether value from the healthcare system has improved:

  • The outcomes generated by U.S. healthcare as measured by life expectancy, mortality amenable to healthcare, and years lost to premature death have improved over the past quarter century.
  • Total years living in disability have increased with mental health and substance use issues being the leading contributors to the increase.
  • If total spending for health had remained constant at 12.8% of GDP, one could easily conclude that the value proposition had improved dramatically. Unfortunately, healthcare spending in 2016 consumed 17.9% of the nation’s wealth, which is a 40% increase from 1991.  

This assessment points to a significant opportunity to be more efficient and effective in improving life expectancy and reducing the burden of disease while shedding light on socioeconomic factors and the potential impact lower investment in social services is having on outcomes.


For Consideration:

  • Did improvements seen over the past quarter century need to cost this much as they did?
  • Had the level of investment in the U.S. health system been at a similar level (percentage of GDP) from 1991, or mirrored other countries, what else might we have invested in to improve the health and wellbeing of citizens?
  • Do you believe that higher levels of investment in public and social services (as happens in other countries) correlates to higher levels of health outcomes?

Additional Resources:


Americans Remain Dissatisfied With Healthcare Costs

This report from Gallup summarizes results of a recent poll showing that most Americans consider healthcare costs and access to be a major issue. Provides a breakdown of the issues along with useful charts to explain details surrounding the issues.

Peterson-Kaiser Health System Dashboard

This site includes a rich set of data from credible sources that allow users to explore a variety of indicators of health spending, quality of care, access, and health outcomes. Provides great visuals and infographics that can be downloaded and used (with attribution). While easy to use, the site also includes a brief tutorial.

The Kaiser Family Foundation (KFF)

The Kaiser Family Foundation (KFF) is a non-profit, private operating foundation focusing on the major health care issues facing the U.S., as well as the U.S. role in global health policy. KFF’s website focuses on policy research, basic health care facts and numbers, and health reform implementation information. The Kaiser Family Foundation is not associated with Kaiser Permanente or Kaiser Industries.

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