Care spending growth slowed considerably in 2016


Medicaid spending grew 11.5% in 2014 and 9.5% in 2015, due in part to the ACA. It also noted that private insurers, Medicare and Medicaid all saw spending slowed due to lower growth rates per enrollee.

CMS blamed the lethargic SNF spending growth on a slowdown in both public and private health insurance outlays: Medicare spending on skilled nursing and CCRC care rose 4.0% in 2015 and just 1.2% in 2016, while private expenditures rose 5.9% a year ago - as compare to a sizable 14.3% in 2015. CMS said that a downturn in enrollment growth, as well as lower retail prescription drug spending. Increased utilization from enrollment expansion and the increasing prevalence of high deductible health plans are likely to have contributed to the trend: 29% of covered workers in 2016 had a high-deductible plan, and average private health insurance deductibles rose 12%.

On a per capita basis, national health spending grew at 3.5%, reaching $10,348 in 2016.

Authors of the CMS report said spending growth slowed previous year for all three major categories of medical goods and services - hospitals, physician/clinical services and retail prescription drugs - for the first time since 2010. Medicare spending rose 3.6% to $672.1 billion, down from 4.8% growth in 2015, accounting for 20% of total healthcare expenditures.

Medicaid, which provides health coverage to primarily poor people, is jointly run by the federal government and individual states.

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Previously, the health spending share of the economy increased 0.5 percentage point from 17.2% in 2013 to 17.7% in 2015. In 2016, however, this number increased to 17.9%.

Hospital spending - which makes up the highest share of health expenditures - increased by 4.7 percent a year ago, a full percentage point lower than in 2015, the report said. The deceleration was largely driven by slower enrollment growth in 2016 after two years of faster enrollment growth due to ACA coverage expansion.

Enrollment growth in Medicare remained fairly steady at 2.8 percent in 2016. Spending growth for clinical services (8.2%) outpaced growth in spending for physician services (4.6%) for the twelfth consecutive year. Per-enrollee spending also increased at a slower rate than 2015 - 0.8% compared with 2.1%. Medicaid goods and services-with the exception of nursing care facilities and continuing care retirement communities-experienced decelerating growth in 2016.

The $329 billion spent on prescription medications in 2016 represents 10 percent of overall health spending.

Spending on retail prescription drugs grew by only 1.3 percent, to $328.6 billion, in 2016. The drop-off in 2016 can be attributed to a decline in spending for drugs used to treat hepatitis C, the introduction of fewer new drugs, and slower growth in prices for both brand name and generic drugs. The share of spending made up of retail prescription drug is similar to what it was in 2009, CMS said.