CMS: Health care spending growth slowed in 2017


The Centers for Medicare and Medicaid Services’ Office of the Actuary’s latest analysis estimates that health care spending growth slowed in 2017 to a rate more akin to that seen between 2008 and 2013. Spending hit $3.5 trillion in 2017, growing at a rate of 3.9%, which CMS’ report noted followed two straight years that saw a slowdown in health care spending growth — 2016’s 4.8% followed 2015’s 5.8%.

Retail prescription drugs, in particular, saw the lowest growth rate since 2012 — 0.4%. Expenditures for the category reached $333.4 billion in 2017, making up roughly 10% of overall spending. CMS’ report attributed the slowdown to slower growth in prescription dispensing, as well as a shift to generics and slower growth in volume among high-cost drug categories, particularly hepatitis C.

While private health insurance and Medicaid saw spending growth slow, Medicare spending growth was relatively flat. CMS’ study, which will be published in the January 2019 issue of Health Affairs, also noted that because U.S. gross domestic product growth increased by 4.2%, health care spending held steady at 17.9% of GDP — marking the first year since 2013 that its share of spending did not increase.

“Prior to the coverage expansions and temporary high growth in prescription drug spending during that same period, health spending was growing at historically low rates,” said Anne Martin, an economist in the Office of the Actuary at CMS and first author of the Health Affairs article. “In 2017, health care spending growth returned to these lower rates and the health spending share of GDP stabilized for the first time since 2013.”

The report also highlights 5% spending growth for clinical services in 2017, which outstripped spending growth for physician services, which came in at 3.9%. Spending for outpatient care centers were contributors to stronger clinical services spending growth. Overall, the report points to a decline in the use and intensity of goods and services as a key driver in the slowdown of health care spending growth.


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