ibusinesslines.com
ibusinesslines.com December 17, 2017


US Healthcare Spending Hit $3.3T in 2016

08 December 2017, 03:29 | Melissa Porter

National Health Spending Growth Slows in 2016 in Wake of Coverage Expansions, Decline in Drug Spending

Dr. Martha Perez examines Maria Lebron in a room at the Community Health of South Florida Doris Ison Health Center in Miami Florida

Authors of the CMS report said spending growth slowed previous year for all three major categories of medical goods and services - hospitals, physician/clinical services and retail prescription drugs - for the first time since 2010. Hospital care expenditure growth slowed from 5.7% in 2015 to 4.7% in 2016.

Health spending increased 4.3 percent to $3.3 trillion compared to a 5.8 percent growth rate in 2015, according to a report by the Centers for Medicare and Medicaid Services (CMS), which administers the government's health programs.

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.

In an online report and a media conference call, CMS attributed faster spending growth in 2014 and 2015 to the implementation of the federal Affordable Care Act and its related Medicaid expansion, which together extended health insurance to almost 19 million people. Medicaid spending also decelerated in growth compared to previous years, increasing 3.9% to $565.5 billion. The deceleration was largely driven by slower enrollment growth in 2016 after two years of faster enrollment growth due to ACA coverage expansion. As with SNFs, the home health industry saw declines in payments from Medicaid, private health insurers, and patients' own pockets. Medicaid and private health insurance spending growth slowed, mainly as the result of ACA enrollments in 2014 and 2015.


Among goods and services, retail prescription drugs saw the lowest growth rate, with physician and clinical services, which make up 20% of overall health spend, up 5.4% and hospital spending up 4.7%, making it 32% of all healthcare spending.

During 2015, US health care spending was 17.7% of gross domestic product. Spending growth for clinical services (8.2%) outpaced growth in spending for physician services (4.6%) for the twelfth consecutive year. Medicaid spending in 2014 grew 11.5%, and 9.5% in 2015.

In 2014 and 2015, spending increased 5.1% and 5.8%, respectively, as the Affordable Care Act expanded health insurance coverage through Marketplace plans and Medicaid. CMS said that a downturn in enrollment growth, as well as lower retail prescription drug spending. The slowing was driven by fewer new drugs being introduced and less spending on pricey treatments for hepatitis C. Major payersPrivate health insurance rose 5.1% to $1.1 trillion, slower than 6.9% growth in 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.

Medicare, a federal program providing insurance coverage for senior citizens, grew by 3.6% in 2016, roughly a one percent decrease compared to the previous two years (4.9% in 2014 and 4.8% in 2015).



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