National health care spending slowed in 2017, according to a report published online Dec. 6 in Health Affairs. Anne B. Martin, Ph.D., from the Centers for Medicare & Medicaid Services in Baltimore, and colleagues examined national health care spending in 2017 and in relation to recent trends.
The researchers note a 3.9% increase in total nominal U.S. health care spending to $3.5 trillion in 2017, down from 4.8% growth in 2016. The 2017 growth rate was similar to that seen between 2008 and 2013, which preceded the faster growth of 2014 to 2015.
The 2014-2015 growth rate was marked by the expansion of insurance coverage and large increases in prescription drug spending. In 2017, the slower growth in health care spending was mainly due to the use and intensity of goods and services, especially for hospital care, physician and clinical services, and retail prescription drugs.
Most major sources of insurance and health care had slower growth in 2017. Health care spending increased 3.2% on a per capita basis and reached $10,739. In addition, 17.9% of the gross domestic product was devoted to health care, similar to the proportion in 2016.
"For a health sector that now accounts for nearly one-fifth of the US economy, future increases in health care expenditures will likely lead to policy decisions focused on affordability and sustainability," the authors write.
Medicare spending represented 20% of all national health care spending in 2017 and reached $705.9 billion (exhibit 1). Total Medicare spending increased at about the same rate in both 2016 and 2017, at 4.3% and 4.2%, respectively.
Enrollment growth decelerated slightly in 2017, increasing 2.5% compared to 2.7% in 2016 (exhibit 3). Accordingly, per enrollee Medicare expenditures increased 1.7% in 2017, similar to the 1.6% growth rate in 2016.
Medicare spending in 2017
Fee-for-service Medicare accounted for two-thirds of overall Medicare spending in 2017, while Medicare private health plans (most of which are Medicare Advantage plans) constituted the remaining one-third (data not shown).
In 2017 slower growth in fee-for-service Medicare spending offset faster growth in spending for Medicare private health plans. Fee-for-service Medicare spending grew by 1.4% in 2017, after increasing 2.6% in 2016 and was influenced by enrollment, which showed no growth in 2017 following an increase of 1.7% in 2016.
Per enrollee, fee-for-service Medicare spending accelerated, increasing 1.5% in 2017 compared to 0.9% in 2016. For physician and clinical services in 2017, faster growth in per-enrollee fee-for-service spending was partially due to an increase in the volume and intensity of goods and services, particularly laboratory services.
This faster growth helped offset the effects of the slower growth in per-enrollee fee-for-service spending for hospital care and prescription drugs (which includes both Part B and Part D retail prescription drug spending for fee-for-service enrollees).