Health Affairs: Healthcare spending increased to $3.2 trillion in 2015
The increase comes on the heels of a five-year period of historically low growth, from 2009 to 2013.
(Jericho)
Healthcare spending in the United States increased 5.8 percent and reached $3.2 trillion in 2015, according to findings published in Health Affairs. On a per-person basis, spending on healthcare increased 5 percent, reaching just shy of $10,000.
The increase comes on the heels of a five-year period of historically low growth, from 2009 to 2013. The faster growth in 2014 and 2015 came as the Affordable Care Act expanded health insurance coverage for individuals through Medicaid and marketplace insurance plans.
Primarily, the faster growth in total healthcare spending in 2015 was due to accelerated growth in spending for private health insurance (an uptick of 7.2 percent), hospital care (5.6 percent) and physician and clinical services (6.3 percent). Strong growth in Medicaid and retail prescription drug spending, at 9.7 and 9 percent respectively, also grew, albeit at a slightly slower rate than in 2014.
[Also: Healthcare spending, driven by prescription drug costs, outpaces economy]
As a result, the health spending share of the gross domestic product went up by 0.6 percentage points over the two-year period, reaching 17.8 percent in 2015.
For the past several decades, the largest increases in the health spending share of the economy have generally taken place around periods of economic recession; yet the increases in 2014 and 2015 occurred more than five years after the end of the most recent recession, and coincided with millions of people gaining insurance coverage after 2013, the authors said.
In 2015, the federal government accounted for the largest share of spending at 29 percent, followed by households at 28 percent, private businesses at 20 percent, and state and local governments at 17 percent.
Federal health spending growth remained high mainly because of the continuation of enrollment increases in Medicaid, the authors said, as newly eligible adults are fully financed by the federal government.
Health spending by private businesses remained steady, as it has for the past several years, at about 20 percent of total health spending.
Health spending by households grew by 4.7 percent, accelerating from 2.8 percent in 2014. Household health spending includes out-of-pocket spending, contributions to private health insurance premiums, and contributions to Medicare through payroll taxes and payment of premiums. Total out-of-pocket spending -- direct consumer payments like deductibles, copayments and coinsurance -- reached $338.1 billion.
Total expenditures for private health insurance hit $1.1 trillion during this time, a 7.2 percent increase that was largely attributed to the increased enrollment spurred by the ACA. Plus, as the labor market improved, enrollment in employer-sponsored plans went up 1.4 percent. Overall, private health insurance continued to be the largest payer in the U.S., accounting for 33 percent of total healthcare spending.
Total Medicaid spending by federal, state and local governments, meanwhile, reached $545.1 billion in 2015, accounting for 17 percent of total national health expenditures. Total Medicare spending reached $646.2 billion, or 20 percent of total healthcare spending.
[Also: CMS adds consumer transparency on drug spending, shows major spikes in some drug costs]
Retail prescription drug spending showed 9 percent growth, reaching $324.6 billion and 10 percent of overall spending. That's slower than the 12.4 percent rate in 2014, but still, growth in this area was faster than that of any other service -- mostly due to increased spending on new medicines, price growth for existing brand-name drugs, increased spending on generics, and a decrease in the number of expensive, "blockbuster" drugs, whose patents expired.
Expenditures for hospital care grew 4.6 percent to $1 trillion, while those for physician and clinical services grew 6.3 percent to $634.9 billion.
The authors said that while the 2014-15 period is unique given the significant changes in health insurance coverage that took place, health spending is projected to increase as a share of the overall economy over the next 10 years. It will be influenced by the aging of the population, changing economic conditions and faster medical price growth.
Twitter: @JELagasse
