The “state of the art” in forecasting long run medical spending is assessed in models used by CMS, CBO, and the Society of Actuaries. Tracking medical expenditures by nominal dollar growth and real per capita spending are useful, yet focusing on the share (of wages, laborforce, or GDP)...

As the forecasting perspective changes from short to medium to long run, the appropriate measure of health spending and the choice of which variables to hold constant, and which to include, changes. In the short run, current dollar spending is the best unit, and the primary factors affecting...