An annual report from the Centers for Medicare & Medicaid Services finds that health spending totaled $2.8 trillion in 2012, which accounted for 17.2% of the nation's gross domestic product (GDP) and was down slightly from the 17.3 % of GDP in 2011.
An annual report from the Centers for Medicare & Medicaid Services finds that health spending totaled $2.8 trillion in 2012, which accounted for 17.2% of the nation’s gross domestic product (GDP) and was down slightly from the 17.3 % of GDP in 2011. As well, the 3.7% growth rate of national health spending was slower than the overall economy, which grew 4.6%.
While the report analysts suggest the Affordable Care Act had minimal impact on the healthcare spending decline, they say it is likely providers began making changes in anticipation of the reform’s required mandates.
“Every hospital executive has started the process of holding costs down,” said Larry Levitt, senior vice president at the Kaiser Family Foundation.
Dana Goldman, a health economist and director of the University of Southern California’s Center for Health Policy and Economics, added: “The persistence of this trend, the more it continues, the less likely it is that it can be explained just by the recession.”
Spending for prescription drugs, nursing care, and private insurance premiums all saw a decline. Although Medicare enrollment had its largest increase in nearly 40 years as baby boomers entered the program, its spending growth also saw a reduction. Conversely, hospital services, physician and clinical services, and consumer spending all saw a slight increase in costs.
“On the whole, it’s good news but it’s not something we can count on going forward,” said David Blumenthal, president of the Commonwealth Fund.
2013 health spending is expected to report a similar low growth, but analysts predict there will be an estimated 6% increase in spending in 2014 as more Americans become insured.
Around the Web
Healthcare Spending Growth Still Very Low [CNN]
Growth in U.S. Health Spending Continues at Historically Slow Rate, Despite Improved Economy [Modern Healthcare]
Healthcare Costs Grew More Slowly Than The Economy In 2012 [NPR]