Pension & Benefits News Growth in health spending continues to outpace inflation
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Wednesday, January 20, 2021

Growth in health spending continues to outpace inflation

By Pension and Benefits Editorial Staff

Total national health care spending in 2019 grew 4.9 percent, which was similar to the 4.7 percent growth in 2018, and the average annual growth since 2016 of 4.5 percent, according to a recent study from the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS). The 2019 National Health Expenditure report noted that this was faster than the 4.0 percent overall economic growth as measured by the gross domestic product in 2019. The growth in total national health care expenditures in 2019 reached $3.8 trillion, or $11,582 per person, up from 2018 when total national health expenditures were $3.6 trillion, or $11,129 per person.

The CMS found the following:

  • Private health insurance spending (31 percent of total health care spending) increased 3.7 percent to $1.2 trillion in 2019, which was slower than the 5.6 percent rate of growth in 2018.
  • Medicare spending (21 percent of total health care spending) grew 6.7 percent to reach $799.4 billion in 2019, which was slightly faster than the 6.3 percent growth in 2018.
  • Medicaid spending (16 percent of total health care spending) increased 2.9 percent in 2019 to reach $613.5 billion.
  • Out-of-pocket spending (11 percent of total health care spending at $406.5 billion in 2019) includes direct consumer payments such as copayments, deductibles, and spending not covered by insurance.
  • Hospital spending (31 percent of total health care spending) growth accelerated in 2019, increasing 6.2 percent to $1.2 trillion compared to 4.2 percent growth in 2018.
  • Physician and clinical services spending (20 percent of total health care spending) increased 4.6 percent to $772.1 billion in 2019, which was faster than the rate of growth in 2018 of 4.0 percent.
  • Retail prescription drug spending (10 percent of total health care spending) increased 5.7 percent in 2019 to $369.7 billion, accelerating from growth of 3.8 percent in 2018.

SOURCE: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html

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