Published: Fri, December 08, 2017
Medicine | By Earnest Bishop

USA healthcare spending growth slowed in 2016

USA healthcare spending growth slowed in 2016

Healthcare spending in the United States grew by 4.3% to $3.3 trillion, or $10,348 per person, and represented almost 18% of the national economy in 2016, federal actuaries report. On a per enrollee basis, private health insurance spending increased 5.1% in 2016, about the same as 2015.

The Centers for Medicare and Medicaid Services have released new data from 2016 showing that upward trajectory of US healthcare spending has slowed.

Roughly 10.2 million people gained Medicaid coverage in 2014 and 2015 combined, and 8.7 million people gained private health insurance, taking the insured percentage of the population from 86 percent in 2013 to almost 91 percent in 2015.

The rate of spending growth for 2016 is more in-line with the average of 4.2% growth seen between 2008 and 2015.

Health care spending in the United States rose 4.3% in 2016, hitting $3.3 trillion, or $10,348 per person, across all sectors, according to the Centers for Medicare & Medicaid Services (CMS).

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Medicare, the federal health program for the elderly, and Medicaid, the government's program for the poor, each reduced spending and fewer people enrolled in private health insurance following a big coverage expansion under Obamacare. Another factor was faster growth in spending on retail prescription drugs during those years. The decline was driven by slower enrollment growth following expansion under Obamacare.

One exception to the slowdown in 2016 was spending on out-of-pocket health charges - including, copayments and deductibles, and spending not covered by insurance - which grew at their fastest rates since 2007. A year before, spending on such drugs grew by 8.9 percent, and in 2014 by 12.4 percent. Medicare spending had increased by 4.8 percent in 2015 and 4.9 percent in 2014.

"Over the last decade, the USA has experienced unique events that have affected the health care sector, including the most severe economic recession since the Great Depression, major changes to the health care system because of the ACA and historic lows in medical price inflation", said Micah Hartman, a statistician in the Office of the Actuary at CMS and lead author of a Health Affairs article on the results.

But because health spending grew faster, as it has for years, than overall gross domestic product, health spending's share of the economy increased to 17.9 percent in 2016, up from 17.7 percent of the economy the year before.

Medicare spending grew 3.6% to $672.1 billion in 2016, slower growth than 2015 (4.8%) and 2014 (4.9%). 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. Despite large fluctuations in growth rates over the past several years, the 10% share of national health spending is similar to the share in 2009. In contrast, Medicaid spending had shot up by 11.5 percent in 2014, and 9.5 percent in 2015.

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