Healthcare spending hits $3.8 trillion: 8 things to know

U.S. healthcare spending grew to $3.8 trillion in 2019, which equates to $11,582 per person, according to an analysis by CMS' Office of the Actuary released Dec. 15. 

Here are eight things to know about the analysis:

1. U.S. healthcare spending grew 4.6 percent in 2019. This compares to a 4.7 percent growth in 2018 and is similar to the industry's average 4.5 percent yearly growth rate.

2. Spending grew by a greater percentage in 2019 than 2018 for hospital care, physician and clinical services and retail prescription drugs. These spending increases were offset by a 3.8 percent decline in expenditures for private health insurance, which was lower because of the elimination of a tax on insurers.

3. Hospital care, which accounted for 31 percent of all healthcare spending in 2019, grew 6.2 percent to $1.2 trillion in 2019. That's compared to spending growth of 4.2 percent in 2018.  CMS said factors like the use and intensity of services contributed to the steeper growth. 

4. Spending on physician and clinical services, which accounted for 20 percent of all healthcare spending in 2019, increased 4.6 percent to $772.1 billion in 2019. This compares to a growth of 4 percent in 2018. CMS also attributed use and intensity of services for the growth.

5. Retail prescription drug spending made up 10 percent of total healthcare spending in 2019. The spending increased 5.7 percent to $369.7 billion, compared to a 3.8 percent growth in 2019. CMS said the increase was because more prescriptions were dispensed, rather than an increase in retail prescription drug prices. During 2019, retail prescription drug prices declined by 0.4 percent. 

6. Medicare spending increased 6.7 percent to $799.4 billion in 2019. This is compared to a 6.3 percent growth rate in 2018. The spending equates to a cost of $13,276 per Medicare beneficiary in 2019, an increase of 4.0 percent from 2018. 

7. Medicaid spending increased 2.9 percent to $613.5 billion, compared to growth of 3.1 percent in 2018.

8. Healthcare's share of gross domestic product increased slightly in 2019 to 17.7 percent, up from 17.6 percent. 

More articles on healthcare finance:
Mass General Brigham reports steep operating loss with $546M in federal aid
States short billions in funding needed for COVID-19 vaccinations
Chicago's Mercy Hospital can't close, Illinois regulators say

 

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