By AuntMinnie.com staff writers

December 7, 2017 -- U.S. healthcare spending in 2016 grew at a rate of 4.3% to reach $3.3 trillion, or $10,348 per person -- a slowdown from 2015's 5.8% growth rate, according to an analysis from the U.S. Centers for Medicare and Medicaid Services (CMS) published in Health Affairs (December 6, 2017).

The increased healthcare spending in 2015 was due to provisions in the Affordable Care Act (ACA) that expanded coverage for individuals through Marketplace plans and the Medicaid program, as well as growth in spending for retail prescription drugs. In contrast, 2016's rate of spending growth was more in line with the average annual rate of 4.2% during the period of 2008 to 2015, wrote lead author Micah Hartman from CMS' Office of the Actuary and colleagues.

"Over the last decade, the U.S. has experienced unique events that have affected the healthcare sector, including the most severe economic recession since the Great Depression, major changes to the healthcare system because of the ACA, and historic lows in medical price inflation," Hartman said in a statement. "In 2016, the slowdown in healthcare spending followed significant insurance coverage expansions under the ACA and very strong growth in retail prescription drug spending in 2014 and 2015."

Healthcare spending's share of the nation's gross domestic product (GDP) also increased from 17.7% in 2015 to 17.9% in 2016.

The researchers attributed slower growth in total healthcare spending in 2016 to decreases in spending for retail prescription drugs, hospital care, and physician and clinical services. Healthcare spending growth also slowed in 2016 for all three major payors: private health insurance, Medicaid, and Medicare.

Hartman's group also noted the following:

  • Private health insurance spending reached $1.1 trillion, increasing by 5.1% in 2016 -- slower than 2015's 6.9% growth.
  • Medicare spending grew by 3.6% in 2016, reaching $672.1 billion and accounting for 20% of total health expenditures.
  • Medicaid expenditures grew by 3.9%, reaching $565.5 billion and accounting for 17% of total healthcare spending.
  • Total expenditures for physician and clinical services grew by 5.4%, reaching $664.9 billion, or 20% of overall health spending.
  • Hospital spending grew by 4.7% to $1.1 trillion, representing 32% of all health expenditures.
  • Retail prescription drug expenditures grew at a rate of 1.3%, reaching $328.6 billion and accounting for 10% of overall health spending.

The analysis will appear in the January 2018 issue of Health Affairs.


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