CMS: National health spending grew 5.3% in 2014
BETHESDA, Md. — The United States spent 17.5 percent of its Gross Domestic Product — $3 trillion — on health care in 2014, according to analysis for the Centers for Medicare and Medicaid Services by its Office of the Actuary. Spending grew at a rate of 5.3% — a marked increase over the 2.9% growth seen in 2013, and an increase of the past five years, which averaged 3.7% growth.
“Two main factors were responsible for health spending growth in 2014—coverage expansion associated with the Affordable Care Act and faster growth in prescription drug spending,” Office of the Actuary accountant Anne B. Martin said. “However, it is unknown how these drivers of health care spending will affect trends over the next few years as the new health insurance landscape continues to evolve.”
In 2014, the Affordable Care Act’s Medicaid eligibility expansion kicked in, leading to an 11.7% spending growth from the government that brought the government’s share of healthcare spending to 28% in 2014, up from 26% in 2013. Medicaid expenditures rose 11% to $495.8 billion as a result, making up 16% of national health spending. Medicare spending grew by 5.5% — higher than the 3% growth seen in 2013 — to reach $618.7 billion. The analysis said that the Medicare spending growth was driven by faster growth in spending on prescription drugs, clinical and physician services, net cost of insurance and government administration. Private health insurance spending rose 4.4% to $991 billion
When it comes to goods and services, spending on retail prescription drugs hit $297.7 billion in 2014, a 12.2% increase — a large difference from 2013’s 2.4% increase and the largest rise in spending since 2002. In line with a trend in the pharmaceutical market, spending on prescription drugs was largely driven by specialty medication, particularly hepatitis C treatments, which on their own contributed $11.3 billion in new spending.
Beyond prescription drugs, spending on physician and clinical services rose 4.6% to hit $603.7 billion. Medicaid physician and clinical services spending rose 22.8% in 2014, more than twice the growth seen in 2013, which the analysis again attributes to expanded Medicaid enrollment. Finally, hospital spending was at $91.8 billion in 2014 — a 4.1% rise the analysis attributes to coverage expansion that led to more use and intensity of hospital services.