Health Affairs This Week It's Not the Prices, Stupid. Michael Chernew on US Health Expenditures
Jan 16, 2026
Michael Chernew, a Harvard health policy professor and health economist, dives into the striking 7.2% growth in 2024 health spending, revealing why this figure is troubling against inflation. He discusses the sacrifices families face, like higher taxes and out-of-pocket costs, due to rising healthcare expenses. Chernew also explores the dual role of AI in healthcare, hinting at its potential to cut costs but also risk further spending. Finally, he advocates for payment reforms to tackle low-value care as a solution to curb excessive expenditures.
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Spending Growth Outpaces Economy
- U.S. health spending growing ~7% is unsustainable relative to inflation and GDP growth.
- Michael Chernew warns the share of GDP for health will keep rising and strain the economy.
Who Pays Isn't The Whole Problem
- Shifting who pays doesn't solve aggregate spending; all money ultimately comes from the public.
- Chernew emphasizes focus must be on whether spending delivers value, not only payment source.
Utilization, Not Prices, Dominated Growth
- 2024 spending growth was driven more by utilization and intensity than price increases.
- Chernew urges separating high-value uses (e.g., GLP-1 drugs) from low-value uses (e.g., excess skin substitutes).