The CMS recently put out a report on the main healthcare concern in the US, which happens to be aggregate annual spending. With the preceding five years of growth noticeably low in this area, the Centers for Medicare and Medicaid Services (CMS) has announced that it has once again climbed in 2014, by 5.3 percent. This totals at $3.03 trillion, which means $9,523 per capita spending, a rise of 4.5 percent from the previous year.
Generally, healthcare makes up 17.5 percent of the GDP that year, compared to 17.3 percent the year before. Federal spending on healthcare went up by 2 percent, and it’s important to note that the government spends the most in that sector. These numbers match projections from CMS in early 2014, which made the statistics a matter of little surprise to tracking agencies.
There are various other drivers to the growth in spending. One of these is that the economy rose enough to make people comfortable about increased healthcare expenditure. Also, Affordable Care Act pushed back the limits of what health insurance would cover under private insurance and Medicaid, something that millions of Americans had been waiting for. Healthcare recently became more affordable, allowing more people to avail it. Also identified as a cause by CMS is the hike in costs of retail prescription drugs. In the report, the agency specifically mentions the new hepatitis C drugs being among the ones which started costing more.
Still increased spending in healthcare is not totally unfavorable. One of the things this implies is that more people are getting the care that they need. What remains unresolved is whether or not the gross expenditure in 2014 was necessary. Some of the key points identified in the report include:
- Physician and clinical service spending went up 4.6 percent in 2014, compared to the previous year’s growth of 2.5 percent.
- Hospital care spending went up 4.1 percent to $971.8 billion in 2014, while the corresponding statistic in 2013 was 3.5 percent.
- Medicare spending went up 5.5 percent in 2014, rising from a 3 percent growth the year before. This rise owes to faster growth in spending for prescription drugs, clinical services, and net insurance payments. Of total healthcare spending, Medicare comprised 20 percent.
- Spending from personal funds went up 1.3 percent in 2014, but this was a bit slower than the 2.1 percent growth in 2013. This can be explained by expanded insurance coverage and a drop in the number of persons who did not have health insurance.
These are the key findings in the Health Spending report published by CMS. It was announced by the CMS Office of the Actuary.