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Credit: Petr Kratochvil
In 2012, overall US health expenditures grew slower than the economy as a whole, according to a report by the Centers for Medicare & Medicaid Services (CMS).
US health spending grew at an annual rate of 3.7% in 2012, to reach $2.8 trillion, or $8915 per person. The rate of growth was 3.9%, and reached $2.7 trillion, in 2011.
Health spending as a share of gross domestic product also fell slightly, from 17.3% in 2011 to 17.2% in 2012.
According to the report, this low growth was driven by slower growth in expenditures on prescription drugs, nursing homes, private health insurance, and Medicare.
On the other hand, growth accelerated for hospital expenditures, physician and clinical services, home healthcare, Medicaid, and out-of-pocket spending.
An article summarizing these findings appears in the January issue of Health Affairs. The full report is available on the CMS National Health Expenditures website.
Areas of slow growth
Medicare spending growth increased by 4.8% in 2012, to reach $572.5 billion, but this was a slight slowdown compared to the 5.0% growth seen in 2011. Medicare expenditures represented 20% of national health spending in 2012.
Retail prescription drug spending also slowed in 2012, growing 0.4%, compared to 2.5% in 2011. This was the result of numerous drugs losing their patent protection, which lead to increased sales of lower-cost generics.
Private health insurance spending increased 3.2% in 2012, compared to 3.4% growth in 2011. The net cost ratio for private health insurance—the difference between premiums and benefits as a share of premiums—was 12.0% in 2012 and 12.4% in 2011.
Spending for freestanding nursing care facilities and continuing-care retirement communities increased by 1.6% in 2012, down from 4.3% growth in 2011, due to a one-time Medicare rate adjustment for skilled nursing facilities.
Accelerated spending
Total Medicaid spending grew 3.3% in 2012, to reach $421.2 billion, an increase over the 2.4% growth seen in 2011. Federal Medicaid expenditures decreased 4.2% in 2012, while state and local Medicaid expenditures grew 15.0%—a result of the expiration of enhanced federal aid to states in the middle of 2011.
Hospital spending increased 4.9% in 2012, up from the 3.5% growth seen in 2011. The accelerated growth in 2012 was influenced by a growth in prices, as well as increased use and intensity of services. Growth in spending from Medicare, Medicaid, and private health insurance hospital spending all accelerated in 2012 compared to 2011.
Spending on home healthcare increased 5.1% in 2012, up from 4.1% growth in 2011. Medicare and Medicaid spending accounted for about 81% of total home healthcare spending in 2012. Medicare spending grew at a faster rate in 2012, but Medicaid spending slowed.
Physician and clinical services spending grew 4.6% in 2012, compared to 4.1% growth in 2011.
Although the growth in prices slowed slightly in 2012, non-price factors such as the use and intensity of services increased faster in 2012.
Out-of-pocket spending increased 3.8% in 2012, to $328.2 billion, up from 3.5% growth in 2011. According to CMS, this reflects higher cost-sharing and increased enrollment in consumer-directed health plans. 
Credit: Petr Kratochvil
In 2012, overall US health expenditures grew slower than the economy as a whole, according to a report by the Centers for Medicare & Medicaid Services (CMS).
US health spending grew at an annual rate of 3.7% in 2012, to reach $2.8 trillion, or $8915 per person. The rate of growth was 3.9%, and reached $2.7 trillion, in 2011.
Health spending as a share of gross domestic product also fell slightly, from 17.3% in 2011 to 17.2% in 2012.
According to the report, this low growth was driven by slower growth in expenditures on prescription drugs, nursing homes, private health insurance, and Medicare.
On the other hand, growth accelerated for hospital expenditures, physician and clinical services, home healthcare, Medicaid, and out-of-pocket spending.
An article summarizing these findings appears in the January issue of Health Affairs. The full report is available on the CMS National Health Expenditures website.
Areas of slow growth
Medicare spending growth increased by 4.8% in 2012, to reach $572.5 billion, but this was a slight slowdown compared to the 5.0% growth seen in 2011. Medicare expenditures represented 20% of national health spending in 2012.
Retail prescription drug spending also slowed in 2012, growing 0.4%, compared to 2.5% in 2011. This was the result of numerous drugs losing their patent protection, which lead to increased sales of lower-cost generics.
Private health insurance spending increased 3.2% in 2012, compared to 3.4% growth in 2011. The net cost ratio for private health insurance—the difference between premiums and benefits as a share of premiums—was 12.0% in 2012 and 12.4% in 2011.
Spending for freestanding nursing care facilities and continuing-care retirement communities increased by 1.6% in 2012, down from 4.3% growth in 2011, due to a one-time Medicare rate adjustment for skilled nursing facilities.
Accelerated spending
Total Medicaid spending grew 3.3% in 2012, to reach $421.2 billion, an increase over the 2.4% growth seen in 2011. Federal Medicaid expenditures decreased 4.2% in 2012, while state and local Medicaid expenditures grew 15.0%—a result of the expiration of enhanced federal aid to states in the middle of 2011.
Hospital spending increased 4.9% in 2012, up from the 3.5% growth seen in 2011. The accelerated growth in 2012 was influenced by a growth in prices, as well as increased use and intensity of services. Growth in spending from Medicare, Medicaid, and private health insurance hospital spending all accelerated in 2012 compared to 2011.
Spending on home healthcare increased 5.1% in 2012, up from 4.1% growth in 2011. Medicare and Medicaid spending accounted for about 81% of total home healthcare spending in 2012. Medicare spending grew at a faster rate in 2012, but Medicaid spending slowed.
Physician and clinical services spending grew 4.6% in 2012, compared to 4.1% growth in 2011.
Although the growth in prices slowed slightly in 2012, non-price factors such as the use and intensity of services increased faster in 2012.
Out-of-pocket spending increased 3.8% in 2012, to $328.2 billion, up from 3.5% growth in 2011. According to CMS, this reflects higher cost-sharing and increased enrollment in consumer-directed health plans.
Credit: Petr Kratochvil
In 2012, overall US health expenditures grew slower than the economy as a whole, according to a report by the Centers for Medicare & Medicaid Services (CMS).
US health spending grew at an annual rate of 3.7% in 2012, to reach $2.8 trillion, or $8915 per person. The rate of growth was 3.9%, and reached $2.7 trillion, in 2011.
Health spending as a share of gross domestic product also fell slightly, from 17.3% in 2011 to 17.2% in 2012.
According to the report, this low growth was driven by slower growth in expenditures on prescription drugs, nursing homes, private health insurance, and Medicare.
On the other hand, growth accelerated for hospital expenditures, physician and clinical services, home healthcare, Medicaid, and out-of-pocket spending.
An article summarizing these findings appears in the January issue of Health Affairs. The full report is available on the CMS National Health Expenditures website.
Areas of slow growth
Medicare spending growth increased by 4.8% in 2012, to reach $572.5 billion, but this was a slight slowdown compared to the 5.0% growth seen in 2011. Medicare expenditures represented 20% of national health spending in 2012.
Retail prescription drug spending also slowed in 2012, growing 0.4%, compared to 2.5% in 2011. This was the result of numerous drugs losing their patent protection, which lead to increased sales of lower-cost generics.
Private health insurance spending increased 3.2% in 2012, compared to 3.4% growth in 2011. The net cost ratio for private health insurance—the difference between premiums and benefits as a share of premiums—was 12.0% in 2012 and 12.4% in 2011.
Spending for freestanding nursing care facilities and continuing-care retirement communities increased by 1.6% in 2012, down from 4.3% growth in 2011, due to a one-time Medicare rate adjustment for skilled nursing facilities.
Accelerated spending
Total Medicaid spending grew 3.3% in 2012, to reach $421.2 billion, an increase over the 2.4% growth seen in 2011. Federal Medicaid expenditures decreased 4.2% in 2012, while state and local Medicaid expenditures grew 15.0%—a result of the expiration of enhanced federal aid to states in the middle of 2011.
Hospital spending increased 4.9% in 2012, up from the 3.5% growth seen in 2011. The accelerated growth in 2012 was influenced by a growth in prices, as well as increased use and intensity of services. Growth in spending from Medicare, Medicaid, and private health insurance hospital spending all accelerated in 2012 compared to 2011.
Spending on home healthcare increased 5.1% in 2012, up from 4.1% growth in 2011. Medicare and Medicaid spending accounted for about 81% of total home healthcare spending in 2012. Medicare spending grew at a faster rate in 2012, but Medicaid spending slowed.
Physician and clinical services spending grew 4.6% in 2012, compared to 4.1% growth in 2011.
Although the growth in prices slowed slightly in 2012, non-price factors such as the use and intensity of services increased faster in 2012.
Out-of-pocket spending increased 3.8% in 2012, to $328.2 billion, up from 3.5% growth in 2011. According to CMS, this reflects higher cost-sharing and increased enrollment in consumer-directed health plans.