High-Intensity Services, Rising Coverage Rates Fuel Health Care Spending Surge
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Dec 20, 2024
In 2023, U.S. health care spending increased 7.5% to $4.9 trillion, up from 4.6% growth in 2022, according to new research from CMS published on Dec. 18 in Health Affairs. This translates to $14,570 per person and a 17.6% share of the gross domestic product (GDP), the researchers said. Several factors contributed to this growth, including the use of higher intensity services and increased Affordable Care Act marketplace and Medicaid enrollment.
Perhaps the biggest increase in spending came from hospital services, which grew a whopping 10.4% in 2023 vs. 3.2% in 2022. This explosion of growth came not from inflation and higher health care prices, but greater demand for higher-intensity services, an increase in outpatient Medicare services, and post-pandemic rebounds after utilization dipped in 2020. In fact, price growth was stable from 2022 to 2023 at 2.8% and 2.7%, respectively. While inflation does influence prices — which increased 2.6% from 2020 to 2023 vs. 1.4% from 2016 to 2019 — price growth in the medical sector lags the general economy, said Anne Martin, lead study author from the CMS Office of the Actuary.
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