- Healthcare spending in the U.S. increased 4.6% in 2019 — on par with previous years and accounting for 17.7% of the nation's total gross domestic product compared with 17.6% in 2018, an analysis from the CMS Office of the Actuary published Wednesday in Health Affairs found.
- Spending on hospital care, physician and clinical services and retail prescription drug purchases — altogether accounting for 61% of total healthcare spending — all rose, though they were mostly offset by declines in the net cost of health insurance after the suspension of the health insurance tax, according to the report.
- Among major payers, private health insurance spending grew 3.7% in 2019 compared with 5.6% in 2018, while Medicare spending grew 6.7% in 2019 compared with 6.3% in 2018. Medicaid spending remained largely unchanged.
Spending on healthcare overall held stable the past four years, though that's before the COVID-19 pandemic hit, of course. Researchers warned next year's report could look much different.
"The full impact of the pandemic on the health care sector is still not known, but it will certainly have profound consequences on the provision and consumption of health care in 2020 and perhaps beyond," Anne Martin, lead author of the report and an economist at the CMS Office of the Actuary, said.
The most recent available data is from 2019, when personal healthcare spending increased 5.2% — faster than it did in 2018 at 4.1%.
The bump was largely driven by spending on hospital care, which grew 6.2% in 2019 compared with 4.2% in 2018, hitting $1.2 trillion and overall accounting for 31% of total national healthcare spending, according to the report.
Although hospital prices grew at a slower rate — 2% in 2019 compared with 2.4% in 2018 — non-price factors, which include "the use and intensity of goods and services" grew 4.2% in 2019, compared with 1.8% in 2018.
Spending on physician and clinical services grew faster in 2019 at 4.6% versus 4% in 2018, though the growth for clinical services outpaced that for physician services, in line with past years.
But most of those gains were counteracted by the suspension of the Affordable Care Act's Health Insurance Tax, which was not in effect for 2019, according to researchers.
Lawmakers have flip-flopped through the years, suspending and reinstating the tax designed to raise money to help offset higher costs as more people gained coverage through the ACA's Medicaid expansion and premium subsidies.
The impact is clear when comparing growth rates for overall healthcare spending among Medicare, Medicaid and private insurance with the growth rates for personal health care spending, researchers said. In each instance, personal health care spending growth accelerated while overall spending decelerated or accelerated at a slower rate.
In 2019, the net cost of health insurance, which includes nonmedical expenses such as administrative costs, taxes, and underwriting gains or losses, declined 3.8% as a result of the health insurance tax suspension, according to the report.