Gov't report: United States health care tab hit $3.3T in 2016

Elias Hubbard
December 7, 2017

Roughly 10.2 million people gained Medicaid coverage in 2014 and 2015 combined, and 8.7 million people gained private health insurance, taking the insured percentage of the population from 86 percent in 2013 to almost 91 percent in 2015. For major payers, Medicare spending growth was flat for the fourth consecutive year.

"When those initial impacts start to wear off, that's when you're going to see that slowdown that we saw in 2016", the official said.

On a per capita basis, national health spending grew at 3.5%, reaching $10,348 in 2016. Specifically, in 3016, CMS actuaries projected healthcare spending to increase by 4.8 percent and rise to $3.358 trillion. These losses were offset by faster growth in hospital prices, which accelerated slightly from 0.9 % in 2015 to 1.2 % in 2016.

The slower growth in hospital spending in 2016 reflected a slower growth of 2.3% in the use and intensity of services, lower than the increase of 3.4% in 2015. Inpatient days and discharges both declined in 2016 by 0.3% and 0.6%, respectively, following two years of growth.

Most of the cost is for the sickest people, with 5 percent of the population accounting for about half the spending. From 2008 to 2015, the average annual health care spending growth rate was actually 4.2%. The growth in clinical services spending was driven primarily by continued strong growth in spending for freestanding ambulatory surgical and emergency centers.

The Office of the Actuary report concludes that, on the nation's current path with the Affordable Care Act's coverage expansion having reached its likely peak, the primary influences on health care spending growth will once again be larger economic factors and demographic changes like the aging of the baby boomers.

Healthcare spending growth in 2016 actually fell below what CMS actuaries projected past year.

The rate at which spending grew last year was lower across many measures - including figures for Medicare, Medicaid, private insurance, prescription drugs and hospitals - than in the previous two years. On a per capita basis, national health spending grew at 3.5%, reaching $10,348 past year. Slower growth was due in part to slower enrollment growth and was partly offset by faster growth in hospital prices, which accelerated slightly from 0.9% in 2015 to 1.2% past year. That is down from 5.7% in 2015.

Medicare and Medicaid accounted for a total of 37% of national health expenditures. Spending for the program grew at 3.6% in 2016-slowing from 4.8% growth in 2015-while enrollment growth was stable. The lone thriving growth in its wealth of goods and services was expenses for nursing care facilities and continuing care retirement communities. Medicaid spending slowed in 2016, increasing by 3.9 percent to $565.5 billion. Last year, on a per enrollee basis, Medicaid spending increased 0.9%, down from 4.5% in 2015, which reflects increased efforts by states to control costs, a decline in supplemental payments to hospitals, and a decrease in per enrollee costs for newly eligible adults.

Following Affordable Care Act (ACA) coverage expansion and significant retail prescription drug spending growth in 2014 and 2015, health care spending growth decelerated in 2016.

Amid calls for the Trump administration to do something about rising drug prices, the report found national spending for prescriptions rose just 1.3 percent in 2016, compared to 12 percent in 2014 and 9 percent in 2015. The slowing was driven by fewer new drugs being introduced and less spending on pricey treatments for hepatitis C.

Other reports by Click Lancashire

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