CMS Actuary Details 2018 National Health Expenditures
Late last year, the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary (OA) released its annual report on National Health Expenditures. The report details overall expenditures by providers and payers, and offers comparisons in growth to prior years. This article will cover some highlights from the report.
Jonathan M. Gold, JD, AMRPA Director of Government Relations & Regulatory Counsel
Highlights:
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Hospital Spending Remains Biggest Outlier Across all Payers Overall Medicare Spending Rises 6.4%
Overall total spending increased 4.6% in 2018 compared to 2017 according to the OA. This brought total national spending to $3.6 trillion, with per capita spending of $11,172 per person. The growth rate was faster than 2017, when spending rose only 4.2% over the previous year. The OA attributed the increased growth to a private health insurance tax put in place by the Affordable Care Act (ACA), which was reinstated in 2018. However, when compared to gross domestic product (GDP), health care spending actually dropped from 17.9% of GDP in 2017 to 17.7% in 2018. Hospital spending remained the leading type of health care spending in 2018, making up 33%, or $1.2 trillion, of the total spending for the year. Hospital spending growth was nearly on par with overall growth, rising 4.5% over 2017 levels. The OA stated that it observed high rates of growth in hospital prices in 2018, but some reduction in utilization during the year as well. Medicare spending growth on hospital care also remained steady, rising 4.6% compared to 2017. The second largest type of spending after hospital care was physician and other clinical services, which totaled $725.6 billion in 2018. The growth rate for 2018 was 4.1%, lower than the 4.7% growth seen in 2017. OA attributed the slowdown in spending growth to utilization declines, and not to a slowdown in price increases. Medicare spending growth was higher for physician and clinical services, growing at a rate of 7.8% in 2018. This is notably higher than the 5.9% and 3.3% growth for Medicare seen in 2017 and 2016, respectively. Nursing facility and care in retirement communities made up 5% of total spending in 2018 for a total of $168 billion. The 1.4% growth seen in 2018 was lower than the 2% rate for 2017. Medicare spending growth on nursing facility and related care was lower than the national average, rising 1.6% in 2018. However, Medicare spending growth was still higher than 2017, when the OA reported a 1% increase in spending for nursing facility and care in retirement communities. Home health care was 3% of total national spending in 2018, totaling $102 billion. The growth rate for 2018 was 5.2%, notably higher than the 4.5% increase in 2017. Medicare spending growth on home health care was even higher, rising 5.6% in 2018, compared to only 3.2% in 2017.
26 AMRPA Magazine / February 2020
