Growth in health spending slows

Growth in health spending slows

That higher growth in those years was due in part to the addition of 19 million Americans to the ranks of people insured by either private insurance or Medicaid as a result of the Affordable Care Act.

The Centers for Medicare and Medicaid Services have released new data from 2016 showing that upward trajectory of US healthcare spending has slowed.

"Over the last decade, the USA has experienced unique events that have affected the health care sector, including the most severe economic recession since the Great Depression, major changes to the health care system because of the ACA and historic lows in medical price inflation", said Micah Hartman, a statistician in the Office of the Actuary at CMS and lead author of a Health Affairs article on the results.

Medicaid, a partially-run federal health insurance program for the poor, grew by 3.9% last year which was a drastic decrease from the previous two years (11.5% in 2014 and 9.5% in 2015).

Hartman attributed the deceleration in 2016 to a decline in spending for drugs used to treat hepatitis C, the introduction of fewer new drugs, and slower growth in prices for both brand-name and generic drugs. Last year, 22 new medicines were approved, compared with 45 in 2015 and 41 in 2014.

Hospital spending hit $1.1 trillion and represented 32% of overall healthcare spending. That is down from 5.7% in 2015. Medicare spending slowed because of lower per enrollee growth rates. Medicaid goods and services-with the exception of nursing care facilities and continuing care retirement communities-experienced decelerating growth in 2016. That was due to slower enrollment growth, which was partly offset by faster growth in hospital prices, which accelerated slightly from 0.9% in 2015 to 1.2% in 2016.

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The 8.2% spending growth for clinical services almost doubled the 4.6% growth in spending for physician services for the twelfth consecutive year.

"Such a strong start to open enrollment shows just how much people want health insurance and that they're finding coverage they can afford when they visit HealthCare.gov", said Lori Lodes, co-founder of Get America Covered. Medicaid hospital spending also fell because of a decline in supplemental payments to hospitals.

As the spending rate for US health services slowed down across most forms of healthcare industries, there was one section that increased: out-of-pocket health charges. Total expenditures in this category reached $664.9 billion, or 20% of overall healthcare spending. Another factor was faster growth in spending on retail prescription drugs during those years. Clinical services spending growth was driven primarily by freestanding ambulatory surgical and emergency centers. The pace of home health spending slowed compared to recent years, though total spending in home health ticked up.

Spending on home health services also contracted in 2016, with the 4.0% gain to $92.4 billion falling short of the 5.8% growth seen in 2015. Increases in medical prices accounted for 1.4 percentage points, while growth in the residual use and intensity of healthcare goods and services accounted for the remaining 1.6 percentage points, the report said.

Enrollment in a health insurance plan on HealthCare.gov is up by 21 percent from previous year among SC residents, with a little more than a week to go in the open enrollment period, according to the Centers for Medicare & Medicaid Services (CMS).

Medicare spending grew 3.6% to $672.1 billion in 2016, slower growth than 2015 (4.8%) and 2014 (4.9%). Medicaid expenditures rose 3.9% to $565.5 billion in 2016, accounting for 17% of total national healthcare spending. But that it only grew at a rate of 4.3% - down from the 5.1% and 5.8% spending growth rates seen in 2014 and 2015, respectively.

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