December 18, 2024

US healthcare spending continues to grow. According to an article in the journal Health Affairs (Anne B. Martin, Micah Hartman, Benjamin Washington, Aaron Catlin, and The National Health Expenditure Accounts Team, National Health Expenditures In 2023: Faster Growth As Insurance Coverage And Utilization Increased, Health Affairs (2024), doi.org/10.1377/hlthaff.2024.01375):

“National health care spending reached $4.9 trillion in 2023 (or $14,570 per person), increasing 7.5 percent from 2022 (exhibit 1). This rate of growth was faster than in 2021 and 2022, when health care spending increased 4.2 percent and 4.6 percent, respectively. The lower growth during 2021 and 2022 was affected by the expiration of temporary federal funding associated with the COVID-19 pandemic (which was initiated in 2020 and was associated with a 10.4 percent increase in health spending in that year). In 2023, as the public health emergency ended and little COVID-19 federal funding remained, the acceleration in spending growth largely reflected increased use of health care goods and services, which influenced the strong growth in both private health insurance and Medicare spending. In addition, private health insurance enrollment increased and Medicaid enrollment levels remained high, leading to an insured share of the population that reached 92.5 percent (exhibit 2).”

In regard to payers, the authors found that “In 2023, state and local governments accounted for a higher share of spending than in 2022, whereas the federal government share was lower as COVID-19-related funding declined and federal Medicaid spending growth slowed. Nevertheless, of the $14,570 in per person health spending in 2023, the federal government accounted for the largest share, at 32 percent ($4,689 per person). Households paid for 27 percent ($3,942 per person), private businesses accounted for 18 percent ($2,677 per person), state and local governments another 16 percent ($2,279 per person), and other private revenues the remaining 7 percent ($983 per person) (exhibit 5).”

The authors noted that “the acceleration in total national health spending growth in 2023 was primarily driven by faster growth in the three largest categories: hospital care, physician and clinical services, and retail prescription drugs. Hospital spending increased 10.4 percent in 2023, following much slower growth of 3.2 percent in 2022, and spending for physician and clinical services increased 7.4 percent in 2023, following growth of 4.6 percent in 2022 (exhibit 4). In both instances, the acceleration reflected an increase in nonprice factors, such as the use and intensity of services, after notably slower growth in 2022 (data not shown). Retail prescription drug spending also contributed to the acceleration, increasing 11.4 percent in 2023 from a rate of 7.8 percent in 2022 (exhibit 4), largely because of changes in the mix of drugs dispensed toward higher-cost, newer brand-name drugs¹⁰ and faster growth in retail prescription drug prices.¹¹“

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World Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems and policies in the US and sixteen other OECD member nations.

Page last updated December 18, 2024 by Doug McVay, Editor.