US Healthcare Spending Hit $3.3T in 2016

US Healthcare Spending Hit $3.3T in 2016

US Healthcare Spending Hit $3.3T in 2016

Those were some of the key findings of a team of researchers from the National Health Expenditures Team at the federal Centers for Medicare and Medicaid Services (CMS), including Micah Hartman, Anne B. Martin, Nathan Espinosa, and Aaron Catlin (the article made it clear that the commentary represented the views of the authors, and not official CMS commentary). The data are presented by type of service, sources of funding, and type of sponsor.

USA health spending rose to $3.3 trillion in 2016, but the pace slowed compared to the previous two years as demand for drugs, hospital care and physician services weakened, according to a federal study released Wednesday.

Home health care, which represents a 3% share of the health care system, saw spending rise at a slower pace in 2016 compared to the previous year.

For additional information, see below. A year before, spending on such drugs grew by 8.9 percent, and in 2014 by 12.4 percent.

The rate at which spending grew last year was lower across many measures - including figures for Medicare, Medicaid, private insurance, prescription drugs and hospitals - than in the previous two years.

Still, health spending continues to outpace overall spending on goods and services, which increased 2.8 percent in 2016. The authors attribute the slowdown to increased generic drug competition and fewer new medicines being approved in 2016, as well as lower spending for pricey hepatitis C medication, which drove high spending in 2014 and 2015.

The study will also appear in the January 2018 issue of Health Affairs and is part of an ongoing series on health spending in the Health Affairs blog. It also noted a decline in spending for hepatitis C drugs. This was partly offset by faster growth in hospital prices, which accelerated slightly from 0.9 percent in 2015 to 1.2 percent in 2016.

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Spending on Medicaid, the federal-state health insurance program for low-income people, rose by 3.9 percent a year ago, compared to 9.5 percent in 2015 and 11.5 percent in 2014. The notable slowdown in private health insurance spending was mainly driven by slower enrollment growth, slower growth in spending for retail prescription drugs, and a continued shift to high-deductible plans.

Medicaid expenditures reached $565.5 billion in 2016, accounting for 17% of total national health expenditures.

Changes in the age and gender mix of the population accounted for 0.6 percent of the growth.

In all, spending on health care in the United States hit $3.3 trillion in 2016, working out to $10,348 per person. "As a result, health care spending increased 5.1 percent in 2014 and 5.8 percent in 2015". Increases in medical prices accounted for 1.4 percentage points, while growth in the residual use and intensity of healthcare goods and services accounted for the remaining 1.6 percentage points, the report said. Growth in non-price factors such as the use and intensity of services increased 3.8% and accounted for most of the increase in spending in 2016, though at a slower rate than the 4.5% increase in 2015.

On a per enrollee basis, Medicaid spending increased 0.9 percent compared to 4.5 percent in 2015, which reflects increased efforts by states to control costs, a decline in supplemental payments to hospitals, and a decrease in per enrollee costs for newly eligible adults.

In other words, inflation in overall US healthcare spending has now returned to something like "normal", at least as gauged by historically predictive patterns. This is slower than the 9.5 and 11.5 percent rates respectively, in 2015 and 2014, both due to the initial impact of Medicaid expansion. In 2014 and 2015, spending increased 5.1 percent and 5.8 percent, respectively, as the ACA provided subsidies to help people get private coverage and most states expanded Medicaid.

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