Health Affairs

Web First: National Health Spending In 2013 Continued Pattern Of Low Growth

Posted By Chris Fleming On December 3, 2014 @ 4:10 pm

A new analysis from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) estimates that in 2013 health care spending in the United States grew at a rate of 3.6 percent in 2013 to $2.9 trillion, or $9,255 per person. The increase was slower than the 4.1 percent growth in 2012 and continued a pattern of low growth that has held relatively steady at between 3.6 percent and 4.1 percent annual growth for five consecutive years.

The continued low growth in health spending is consistent with the modest overall economic growth since the end of the recent severe recession and with the long-standing relationship between economic growth and health spending—particularly several years after the end of economic recessions, when health spending and overall economic growth tend to converge. As a result, health spendingfs share of the nationfs gross domestic product (GDP) remained at 17.4 percent in 2013.

The study was released today by Health Affairs as a Web First [1] and will appear in the January issue of Health Affairs. It was discussed this morning at a reporters briefing [2] in the National Press Club.  

Slower growth in both private health insurance and Medicare contributed to the 0.5 percentage-point slowdown in the nationfs health care spending growth. Private health insurance premium growth slowed from 4.0 percent in 2012 to 2.8 percent in 2013. Growth in private insurance benefits slowed from 4.4 percent in 2012 to 2.8 percent in 2013, largely driven by slower growth in spending for hospital services and physician and clinical services.  Medicare spending growth decelerated as a result of slower growth in enrollment, net impacts of the Affordable Care Act (ACA) and the federal budget sequestration.

gThe key question is whether health spending growth will accelerate once economic conditions improve significantly,h said Micah Hartman, a statistician in the Office of the Actuary at CMS and lead author of the Health Affairs article. gHistorical evidence suggests it will.h

Legislation, including the ACA and budget sequestration, affected spending growth trends in 2013, particularly for Medicare. Several key ACA provisions exerted downward pressure on health spending growth, including the adjustments to Medicare fee-for-service payments, reduced Medicare Advantage base payment rates, increased Medicaid prescription drug rebates and the medical loss ratio requirement (which requires insurers spend a minimum percentage of revenue on medical claims and health care quality improvements).

At the same time, other provisions—such as early Medicaid expansion initiatives, a temporary increase in Medicaid primary care provider payments, reducing the Medicare Part D doughnut hole and the implementation of prescription drug industry fees—exerted upward pressure on health spending growth.

Major areas where spending growth slowed (from 2012) included:

Major areas where spending growth accelerated in 2013 (over 2012) included:


Article printed from Health Affairs Blog: http://healthaffairs.org/blog

URL to article: http://healthaffairs.org/blog/2014/12/03/health-affairs-web-first-national-health-spending-in-2013-continued-pattern-of-low-growth/

URLs in this post:

[1] Web First: http://content.healthaffairs.org/lookup/doi/10.1377/hlthaff.2014.1107

[2] reporters briefing: http://www.healthaffairs.org/events/2014_12_03_cms_briefing/