Healthcare spending in U.S. increases 5.3 percent to $3 trillion
Healthcare spending in the U.S. increased 5.3 percent in 2014 to $3 trillion or $9,523 per person, while 17.5 percent of the country’s gross domestic product (GDP) was devoted to healthcare spending last year.
The Department of Health and Human Services released the annual data on Dec. 3. The results were simultaneously published online in Health Affairs.
In 2013, healthcare spending grew 2.9 percent, which was the smallest increase since the National Health Expenditure Accounts data began 55 years ago. Healthcare spending in 2013 accounted for 17.3 percent of GDP.
Between 2009 and 2013, healthcare spending increased an average of 3.7 percent, which was low by historic standards.
The researchers mentioned healthcare spending growth in 2014 was primarily due to increases in private health insurance and Medicaid spending. Private health insurance spending increased 4.4 percent because of the expansion of insurance coverage under the Patient Protection and Affordable Care Act (ACA). With 2.2 million more people insured last year compared with 2013, there were also increases in spending for prescription medications, physician and clinical services and hospital care.
The ACA also expanded Medicaid eligibility in 2014, which led to an 11 percent growth in Medicaid spending as 7.7 million more people were covered through Medicaid.
Meanwhile, prescription drug spending increased 12.2 percent last year, the highest rate increase since 2002. The researchers mentioned the increase was due to high cost medications to treat hepatitis C, cancer and multiple sclerosis.
Last year, 88.8 percent of people in the U.S. had insurance, the highest share since 1987. The number of uninsured individuals decreased by 8.7 million people last year.
In 2014, the federal government’s share of healthcare spending increased to 28 percent, the private business share of spending remained flat at 20 percent and the share of spending by households, state and local businesses each slightly decreased to 28 percent, 17 percent and 17 percent, respectively.
“The return to faster growth and an increased share of GDP in 2014 was largely influenced by the coverage expansions of the Affordable Care Act,” the researchers wrote. “But how the health sector responds to the evolving access and incentive landscape, as well as underlying economic conditions, will determine the future trajectory of health spending growth.”
Executive Editor
Tim Casey joined TriMed Media Group in 2015 as Executive Editor. For the previous four years, he worked as an editor and writer for HMP Communications, primarily focused on covering managed care issues and reporting from medical and health care conferences. He was also a staff reporter at the Sacramento Bee for more than four years covering professional, college and high school sports. He earned his undergraduate degree in psychology from the University of Notre Dame and his MBA degree from Georgetown University.