Altarum: Hospital spending increases drive slight uptick in overall healthcare spending growth 

stethoscope, coins and calculator
A new report from Altarum dives into healthcare spending trends so far this year. (Getty/mckare)

Healthcare spending growth took a slight uptick over the past year, according to a new report. 

The latest monthly spending brief (PDF) from Altarum Institute shows that spending grew by 5.2% between June 2017 and June 2018, compared to 4.2% the year prior. By comparison, the nation’s gross domestic product grew by 4.9% in that same window; healthcare spending accounts for 17.9% of GDP. 

Americans spent $3.66 trillion on healthcare in the first five months of the year, according to the report, which is an increase of just under 1% from projections of $3.61 trillion in spending. Altarum attributes that uptick to an increase in spending on hospital care, which accounts for about 32% of spending overall. 


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“As a fraction of GDP, we’re about where we were,” George Miller, Ph.D., Altarum fellow and one of the report’s authors, told FierceHealthcare, “but we’re spending and growing more than we expected."

RELATED: Health spending trends may damage the US economy 

The figures align with projections from the Centers for Medicare & Medicaid Services, which issues both a retrospective and prospective spending report each year. In February, CMS’ Office of the Actuary estimated that healthcare spending could increase by 5.5% annually and reach $5.7 trillion by 2026. 

CMS estimated in its 2017 projections that growth in healthcare spending would outpace GDP growth, a trend it expects to continue through 2026 and is reflected in Altarum’s findings. 

As of June, spending on hospital care has reached $1.173 trillion, significantly outpacing the next largest spending category: physician services, at $733 billion or 20% of spending, according to Altarum. Spending on drugs accounted for 10%, or $355 billion.  

RELATED: CMS—Healthcare spending growth slowed in 2016; per capita spending topped $10K 

Though spending on hospital care makes up a large chunk of spending overall, growth in such spending is on par with the year prior; growth rates were just under 4% in June 2017 and just over 4% in 2018. 

Far larger gaps in spending were recorded in dental care and nursing home care. Dental care spending growth increased the most overall between June 2017 and 2018, jumping by 7.7%. By comparison, spending on dental care increased by about 3% between June 2016 and 2017. 

Spending on nursing home care increased by about 6% over the past year, compared to just over 2% the year before. 

Altarum uses data from the Bureau of Economic Analysis, figures that typically align with CMS’ data, and Miller said that BEA issued a five-year “benchmark” update in July—changes that are also likely to be reflected in CMS’ forthcoming updates to its own projections. 

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