Healthcare Spending Review

The Centers for Medicare and Medicaid Services through the Office of the Actuary recently released detailed data on 2014 healthcare spending in the United States.  Within CMS are the National Health Expenditure Accounts (“NHEA”).  The (NHEA) are the official estimates of total health care spending in the United States. Dating back to 1960, the NHEA measures annual U.S. expenditures for health care goods and services, public health activities, government administration, the net cost of health insurance, and investment related to health care.  Here is a high level overview of the released 2014 data:

Healthcare spending grew $3 trillion in 2014, a growth rate of 5.3% after 5 years of historically low growth.  The new growth is attributed primarily to coverage expansions under the Affordable Care Act.

Over $991 billion was spent by private health insurance which accounted for 1/3 of total national healthcare expenditures.  Contributing factors include increased enrollment and faster growth in spending for retail prescription drugs, physician and clinical services, and hospital care.

Nearly 8.7 million more people had health coverage in 2014, increasing the insured share of the population from 86% in 2013 to 88.8% in 2014.

It is estimated that $9,523 was spent per person on healthcare in 2014.

Approximately 17.5% of the nation’s gross domestic product (“GDP”) was attributable to healthcare spending in 2014; in 2013, it was 17.3%.

The growth rate of retail prescription drug spending was 12.2%.  The nearly $298 billion spend represents the largest increase since 2002.

The growth rate of hospital spending was 4.1% or nearly $972 billion.  The higher growth rate is attributable in part to increased use and intensity of hospital services due to coverage expansion, which was reflected in the faster growth of Medicaid and private health insurance spending.

More detailed data behind the healthcare spending can be found here.

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