New National Health Expenditures Analysis from CMS

A new report from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS), published in the January 2013 issue of Health Affairs, estimates that health care spending in the United States grew at a rate of 3.9 percent in 2011. That level of annual growth is identical to spending growth rates in 2009 and 2010, which means that growth in all three years has occurred at the slowest rates ever recorded in the 52-year history of the National Health Expenditure Accounts.

Total health care spending growth in 2010 and 2011 continued to track closely with the growth in nominal gross domestic product (GDP) in both years, and the health spending share of GDP stayed stable in 2011 at 17.9 percent. Yet despite the overall stability in health spending, "we observed faster growth in spending among some payers and services in 2011," said Micah Hartman, statistician in the Office of the Actuary at CMS and lead author of the Health Affairs article.

In 2011, for example, there was slower growth than in 2010 in the net cost of insurance and in noncommercial medical research. There was also a decline in spending in government public health activities. At the same time, there was faster growth in spending in 2011 than in 2010 for personal health care goods and services. Growth in this category was mainly due to an increase in non-price factors, such as the use and intensity or complexity of services.

Faster growth in personal health care spending in 2011 was also driven by increased growth in spending for retail prescription drugs and physician and clinical services, which was partly offset by slower growth in spending for hospital services. Furthermore, from a payer perspective, spending for Medicare, private health insurance, and consumer out-of-pocket payments increased faster in 2011 compared to 2010, although spending for the Medicaid program grew more slowly.

On the whole, the impact of provisions of the Affordable Care Act on aggregate health spending growth in 2010 and 2011 was minimal. However, there was some impact on certain subcomponents of national health expenditures; for example, private health insurance spending and enrollment were impacted by the provision that expanded private health insurance coverage to dependents of enrollees up to age 26.