Health care spending slows down


Still, health care spending grew slightly faster than the overall economy in 2016, increasing health care's share of the economy from 17.7 percent in 2015 to 17.9 percent previous year.

"The slowdown on overall healthcare spending was broadly based, as spending for the largest categories by payer and by goods and services decelerated", report lead author Micah Hartman said Wednesday in a media availability. Medicaid hospital spending also fell because of a decline in supplemental payments to hospitals.

CMS said it didn't have details on how other value-based models such as bundled payments have played a part in slower healthcare spending increases.

But things had sped up again in 2014-2015, the authors noted. The increases in the health spending share of the economy in 2014 and 2015 were largely due to coverage expansion that contributed to 8.7 million individuals gaining private health insurance coverage and 10.2 million gaining Medicaid coverage over the period and to significant growth in retail prescription drug spending. Also, those years, saw rapid spending growth for retail prescription drugs.

Those two factors accelerated spending growth more than it had in recent years. Increases in medical prices accounted for 1.4 percent, while growth in the use and intensity of healthcare goods and services accounted for the remaining 1.6 percent.

Despite the slower growth in 2016, healthcare spending still increased faster than the rate of growth for gross domestic product.

In effect, national health spending has returned to the moderate growth levels that followed the 2007-2009 recession.

In other words, inflation in overall US healthcare spending has now returned to something like "normal", at least as gauged by historically predictive patterns. Hospital care expenditure growth slowed from 5.7% in 2015 to 4.7% in 2016. "In addition, growth in spending for retail prescription drugs was very strong in 2014 and 2015 (12.4 percent and 8.9 percent, respectively), mainly the result of an increase in spending for hepatitis C medication". Out-of-pocket spending grew 3.9 percent to $352.5 billion in 2016, faster than the 2.8 percent growth in 2015. For major payers, Medicare spending growth was flat for the fourth consecutive year.

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The growth in clinical services was driven primarily by continued strong spending for freestanding ambulatory surgical and emergency centers.

During 2014 and 2015, the health spending share of the economy increased 0.5 percentage point from 17.2 percent in 2013 to 17.7 percent in 2015. And they told reporters they could not recall another time before past year that spending growth had slowed for all three major payers - private health insurance, Medicare and Medicaid - and for goods and services, too. Republicans in Congress have tried unsuccessfully to cap federal Medicaid spending to states to help control growth in the program, an effort opposed by Democrats and advocates for the poor.

This is a slowdown from the 5.7 percent growth in expenditures for hospital care in 2015.

Together, Medicare and Medicaid made up 77% of home health spending in 2016. Major payersPrivate health insurance rose 5.1% to $1.1 trillion, slower than 6.9% growth in 2015.

Medicare spending hit $672.1 billion, accounting for 20% of total healthcare expenditures. Spending growth per Medicare enrollee increased at a slower rate in 2016 (0.8%) than in 2015 (2.1%).

The rate of healthcare spending in the United States slowed down previous year to levels previously seen between 2008-2015, driven by much slower growth in spending for retail prescription drugs, as well as hospital care and physician and clinical services.

Medicaid accounts for 17 percent of total national health expenditures. Last year, 22 new medicines were approved, compared with 45 in 2015 and 41 in 2014.

Medicaid goods and services spending decelerated in 2016, with the exception of nursing care facilities and continuing care retirement communities. Hospital spendingHospital spending increased 4.7%, reaching $1.1 trillion, and represented 32% of overall healthcare spending.