U.S. Health Care Spending Continues Slow Growth

U.S. health care spending from all sources increased by 3.7 percent in 2012, according to the Office of the Actuary of the Centers for Medicare and Medicaid Services (CMS).  This marks the second lowest annual rate of increase in the last ten years and was nearly a percentage point lower than the 4.6 percent growth in Gross Domestic Product (GDP). Health care represented 17.2 percent of the economy in 2012, down from 17.3 percent in the previous year. Spending on nursing homes and CCRCs accounted for five percent of total health care expenditures and saw the lowest cost growth, 1.6 percent, of any service. Home care spending increased by 5.1 percent to represent three percent of total spending.

Prescription drugs also helped to dampen expenditure growth: Drug spending increased by 0.4 percent to account for nine percent of health spending.  Hospital spending rose by 4.9 percent and represents nearly one-third of all health care expenditures, while physician and clinical services increased by 4.6 percent to account for 20 percent of spending.

In 2012, out-of-pocket health spending rose by 3.8 percent, while private health insurance costs increased 3.2 percent. Medicare spending rose by 4.8 percent to $572.5 billion, with Medicaid experiencing modest growth of 3.3 percent to reach $421.2 billion. Although total health care expenditures neared $2.8 trillion, or $8,915 per person, 2012 marked the fourth consecutive year that the annual growth rate remained below four percent.

A CMS press release with links to the data tables is available here.

Contact:  Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841