CMS reports slowed health spending growth

Gov’t report US health care tab hit $3.3T in 2016

The report noted that US health spending rose by 5.1 percent in 2014, and then by 5.8 percent in 2015. The data are presented by type of service, sources of funding, and type of sponsor.

During a call explaining the results, Micah Hartman, a statistician with CMS and an author of the report, said there was more spending and faster growth in 2014 and 2015 as more people gained health insurance coverage through the Affordable Care Act (ACA) and through expanded coverage through the Medicaid program.

The health spending share of the economy was 17.9% in 2016.

The Centers for Medicare and Medicaid Services have released new data from 2016 showing that upward trajectory of USA healthcare spending has slowed.

The slowdown in health spending growth was seen broadly across all major forms of private and public insurance, and in medical services, prescription drugs and other goods, according to an official analysis released Wednesday. The notable slowdown in private health insurance spending was mainly driven by slower enrollment growth, slower growth in spending for retail prescription drugs, and a continued shift to high-deductible plans.

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.

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. Spending growth for clinical services (8.2%) outpaced growth in spending for physician services (4.6%) for the twelfth consecutive year. Total expenditures in this category reached $664.9 billion, or 20% of overall healthcare spending.

Together, Medicare and Medicaid made up 77% of home health spending in 2016.

Medicaid expenditures reached $565.5 billion in 2016, accounting for 17% of total national health expenditures. Medicaid spend grew 3.9%, compared with 9.5% in 2015 and 11.5% in 2014.

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). Per-enrollee spending also increased at a slower rate than 2015 - 0.8% compared with 2.1%. Medicare spending had increased by 4.8 percent in 2015 and 4.9 percent in 2014.

In all, payers spent $162.7 billion on care at nursing homes and continuing care retirement communities (CCRCs), an increase of 2.9% from 2015.

Retail prescription drugs expenditures reached $328.6 billion and represented 10% of overall health spending. But that it only grew at a rate of 4.3% - down from the 5.1% and 5.8% spending growth rates seen in 2014 and 2015, respectively.

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