Has the U.S. Bent the Healthcare Cost Curve? Key Drivers of Slower Medical Spending Growth

U.S. healthcare spending in 2024 turned out to be significantly lower than what long-term projections had predicted back in 2010. In fact, medical costs as a share of GDP were about 15% below those earlier forecasts, with total savings approaching nearly $1 trillion for that year alone. Spending was only slightly higher than it had been in 2010, suggesting a much slower growth path than expected.

Researchers use this trend to ask whether the United States has actually managed to “bend the healthcare cost curve,” meaning whether long-term spending growth has been successfully slowed. To explore this, they developed a model that looks at how medical technologies are created and how they are used in real-world healthcare systems. Both innovation and incentives for using new treatments can either raise or reduce overall costs.

The analysis identifies five key reasons behind slower spending growth. First, some new medical technologies both improve health outcomes and reduce costs at the same time. Second, healthcare supply becomes more responsive over the long run than in the short term. Third, overall population health has improved, reducing demand for care. Fourth, changes in reimbursement policies have lowered demand and made patients more price-sensitive. Finally, slower price growth reflects these combined effects.

Cutler, D. M., & Klarnet, L. R. (2026). Has the United States bent the health care cost curve? National Bureau of Economic Research. https://www.nber.org/papers/w35231