In 1980, hospital care accounted for 46.9 percent of total U.S. personal health care spending, compared with 41.6 percent in 1993. Some states showed a large decrease in hospital spending as a percentage of total health care spending between 1980 and 1993. Since 1965, with the introduction of Medicare and Medicaid, government spending on health care has grown from 20.4 percent of total personal health care expenditures to 43.1 percent in 1993. Medicare and Medicaid account for the largest share of total government spending, growing from 55.0 percent in 1970 to 78.3 percent in 1993. The share of total personal health care spending accounted for by Medicare and Medicaid varies greatly by state, ranging from 23.8 percent in Alaska to 44.6 percent in New York.
Several factors contribute to the variations in health care spending by state.
One of the most important is demographics.