Healthcare Spending Increases Reach a 54 Year Low

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Spending on healthcare in the U.S. had the lowest rate in 2013 since the government first started tracking it in 1960. Healthcare spending in 2013 totaled $2.9 trillion, a 3.6% increase from 2012. Moreover, government economists believe that spending for health care in 2013 averaged $9,255 per person. Analysts believed that the rate would increase after the recession ended in the middle of 2009.

Medicare payments to hospitals and health organizations, cuts in federal spending because of the 2011 law, and high-deductible health insurance plans all contribute to the decreased use of care, since patients have to bear most of the cost. Nonetheless, growth in Medicaid and private insurance spending helped offset the decreasing rate.

The government also said that medical prices increased just 1.3% in 2013, which is less than prices in the general economy. Medicare and Medicaid accounted for more than one-third of all health spending.

Sales of prescription drugs totaled $271 billion for 2013, which accounts for 9.3% of health spending. There is an increase in the use of high-cost specialty drugs and the use of low-cost generic medicines.

The Affordable Care Act requires federal officials to review insurance rates to identify unwarranted increases in premiums, and it also requires insurers to spend a minimum of 80% of the premium revenue on medical care and quality improvement activities.

Summary by MedicalGroups.com

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