Overall healthcare spending in July was 5.6 percent higher than it was a year ago, according to new data from the Altarum Institute. That trend was slightly lower than compared to June, but considerably lower than the trend from earlier in the year.
Spending was trending upward at a 5.6 percent rate in June. Altarum had estimated that spending grew at a 6.3 percent annual rate for the first part of this year.
However, spending on hospital services outstripped the overall trend. It rose 6.5 percent compared to July 2014. And a year ago, the spending increase was 5.2 percent. Spending on drugs was up 9.7 percent, but that was actually significantly lower than the 12.9 percent growth rate reported in July 2014.
In a study released earlier this year, the Urban Institute had forecast that spending growth would remain slow for many years to come, and the Centers for Medicare & Medicaid Services said public and private expenditures would be about $2.5 trillion less from 2014 through 2019 than projections that had been made five years previously.
Meanwhile, price growth has remained low. Healthcare prices rose at a 1.1 percent annual rate in 2015, the third consecutive month at this rate. In this instance, hospital price increases were actually below the norm, at a 0.9 percent rate for July. Prescription drug prices led the pack, increasing 4.4 percent. That compares to the 4.2 percent annual clip drug prices were growing in August 2014.
Prices for clinical and physician services and non-durable and durable medical equipment actually were on track to dip for the year, down 1.1 percent, 1.2 percent and 0.5 percent, respectively.
"There are close to 10 million more people with health insurance than there were a year ago, and this has both increased the demand for healthcare and reduced the uncompensated component," said Altarum Center Director Charles Roehrig in a statement. "These factors help explain the surge in healthcare spending...despite the slow growth in prices for healthcare services."
To learn more:
- read the spending report (.pdf)
- here's the prices report (.pdf)
- check out the Altarum statement