U.S. Health Care Spending: A County-by-County Analysis

Key Takeaways:

• Researchers analyzed health care spending across 3,110 U.S. counties, revealing stark disparities in expenditures by geography, age, and health condition.
• Nassau County in New York had the highest per capita spending at $13,332, while Clark County in Idaho spent the least at $3,410.
• Type 2 diabetes was the costliest health condition nationally, with significant variations in spending across regions.
• Ambulatory care accounted for 42% of total spending, highlighting the importance of primary and outpatient services.
• Utilization rates were the main driver of cost variations, underscoring the role of insurance coverage, income, and obesity.

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Geographic Disparities in Health Care Spending

A study conducted by researchers at the Institute for Health Metrics and Evaluation (IHME) at the University of Washington’s School of Medicine has provided the most comprehensive analysis to date of U.S. health care spending. The research, published in JAMA and JAMA Health Forum, examined over 40 billion insurance claims and nearly one billion facility records, offering a detailed look at expenditures across 3,110 counties.

The findings reveal dramatic fluctuations in per capita health care spending. Nassau County, located in New York City’s metropolitan area, topped the list with an expenditure of $13,332 per person—nearly four times the lowest figure in the country, recorded in Clark County, Idaho, at $3,410. Such disparities were not limited to different states but were also evident within them. For example, Sumter County in Florida, a suburban area of Orlando, spent $11,680 per capita, nearly double the $5,899 spent in nearby Osceola County.

At the state level, Idaho, Utah, and New Mexico had the lowest per capita spending, ranging from $6,028 to $6,368. In contrast, Alaska, New York, and Massachusetts reported the highest expenses, exceeding $9,000 per person. These variations highlight the complex interplay of geographic, economic, and demographic factors influencing health care costs.

Health Conditions Driving Costs

The study also identified significant differences in spending based on specific health conditions. Nationally, type 2 diabetes emerged as the most expensive condition, costing $144 billion annually. Other musculoskeletal disorders followed at $109 billion, with oral disorders accounting for $93 billion. Ischemic heart disease and urinary diseases rounded out the top five, costing $81 billion and $72 billion, respectively.

Regional disparities were particularly striking for type 2 diabetes. Sumter County in Florida had the highest per capita spending on this condition at $1,216, while states like Georgia, Alaska, and Colorado spent about 90% less. This variation underscores the uneven burden of chronic diseases across the country.

Additionally, the study found that certain conditions are driving rapid increases in health care costs. Autism spectrum disorders experienced the fastest average annual growth rate at 13%, followed by opioid use disorders at 9%. Alcohol use disorders and other substance use disorders also showed significant growth, reflecting ongoing public health challenges.

Types of Care and Their Costs

Researchers categorized health care spending into seven types of care: ambulatory, inpatient, pharmaceutical, nursing facility, dental, home health, and emergency department. Ambulatory care, which includes primary care and outpatient services, accounted for the largest share of expenditures at 42%, totaling over $1 trillion. Inpatient care followed at 24%, or $578 billion, while pharmaceutical spending represented 14%, costing Americans $331 billion. Emergency department care had the smallest share at just 2%, or $56 billion, but it exhibited the fastest growth and the largest variation in per capita spending.

Geographic disparities were evident even within specific types of care. Three counties in California ranked among the top 10 for ambulatory care spending. Marin County in the San Francisco Bay Area had the highest figure at $6,443, while counties in Texas spent 78% less for the same type of care. However, disparities were not confined to different states; within Texas, the highest ambulatory care spending was three times greater than the lowest.

“The contrast in ambulatory care spending across the country highlights the urgent need to address gaps in access to primary care that take into account the extent to which people use services based on their geographic location, age, and health conditions,” said lead author Dr. Joseph Dieleman, an associate professor at IHME.

Age and Its Impact on Spending

The study also revealed significant variations in health care expenditures by age. More than 40% of total spending was allocated to individuals older than 65, while less than 12% went to those under 20. Although the 65-to-69 age group incurred the highest total costs, the oldest age group—85 and above—had the highest per capita spending.

These findings underscore the growing financial burden of caring for an aging population. As life expectancy increases, so too does the demand for medical services, particularly for chronic conditions that become more prevalent with age.

Role of Health Care Payers

Health care spending also varied significantly depending on the payer. Sumter County in Florida had the highest per capita Medicare spending at $18,284, three times higher than the lowest amounts in states like Texas, Nebraska, and Vermont. Private insurance spending was highest in Washington, D.C., at $10,955, making it seven to eight times the lowest costs in states such as Colorado, Kentucky, and Texas. Medicaid spending was highest in Missouri at $12,420, four times the lowest spending in states like South Dakota, Alaska, and Oklahoma.

Understanding the Drivers of Variation

The study identified utilization rates as the primary driver of cost variations, accounting for 65% of the differences. Price and service intensity explained 24%, while age and disease prevalence played smaller roles, contributing 4% and 7%, respectively. Factors such as insurance coverage, income, and obesity were closely linked to utilization rates, while median household income influenced price and service intensity.

For example, Utah’s low per capita spending was attributed to its younger population, which reduced demand for various types of care. Conversely, Alaska’s high spending was driven by elevated costs for ambulatory, inpatient, and emergency department care.

Dr. Dieleman emphasized the potential for these insights to inform national health care strategies. “If people had better insurance coverage, they would be more likely to pursue regular health checkups, potentially reducing the need for emergency care. This change would also lead to better health outcomes and allow emergency providers to focus on patients with urgent medical needs,” he said.

This comprehensive analysis provides a roadmap for addressing inefficiencies in the U.S. health care system. By understanding the drivers of cost variations, policymakers and health care providers can work toward equitable and sustainable solutions.