CMS: Healthcare spending growth continues at historic low rate

Healthcare spending in the United States rose 3.6 percent in 2013, according to data from the Centers for Medicare & Medicaid Services (CMS) and published in the journal Health Affairs.

Altogether, the nation spent $2.9 trillion on healthcare services last year, or the equivalent of $9,255 per person. The proportion of healthcare spending as part of the gross domestic services stayed unchanged between 2012 and 2013, remaining at 17.4 percent.

The spending growth has been consistent over the past five years, according to CMS. It has stayed in the range of 3.6 percent and 4.1 percent annual growth since 2009. The agency primarily attributed the sluggish growth to the lingering effects of the Great Recession, which began at the end of 2007.

CMS said that spending growth remained on the low end last year due to a a variety of factors. Among them was spending in the hospital setting, where growth slowed to 4.3 percent last year, reaching $936.9 billion. That compares to a 5.7 percent increase in 2012.

Slower growth in both private health insurance and Medicare spending also were contributors. Private health insurance spending slowed from 4.0 percent in 2012 to 2.8 percent in 2013. Medicare spending also slowed down, to 3.4 percent last year from 4 percent in 2012, primarily due to reimbursement changes from the Affordable Care Act and the effects of sequestration.

However, spending on pharmaceuticals and Medicaid accelerated. Drug spending grew by 2.5 percent, up from 0.5 percent in 2012. Medicaid spending rose by 6.1 percent, compared to 4 percent in 2012.

Despite the slowdown, the annual increases in healthcare spending are still among the fastest in the developed world.

"The key question is whether health spending growth will accelerate once economic conditions improve significantly," said Micah Hartman, a statistician in the Office of the Actuary at CMS and lead author of the Health Affairs article, in a statement. "Historical evidence suggests it will."

Utilization has slowly been on the rise in recent years, suggesting that higher spending increases will eventually reappear as well, according to the National Journal.

To learn more:
- read the Health Affairs article
- check out the CMS announcement
- here's the National Journal article

 

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