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Health Care Costs 101: Slow Growth: A New Trend?

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Health Care Costs 101

Slow Growth: A New Trend?

Katherine B. Wilson

While the US continues to spend a greater percentage of GDP on health care than any other industrialized nation, the 2011 increase bucked historical trends, according to the latest Health Care Costs 101.

September 2013

The United States continues to spend a greater percentage of its wealth on health care than any other industrialized nation. But a smaller overall increase in 2011 spending was in notable contrast to historical trends. The 3.9% rise was on pace with the growth rate in the economy as a whole and with inflation. Whether this signals a change in the cost trend line or is simply a result of lowered spending during the recession is hard to know. With sweeping changes to the health care system around the corner, these latest figures may indicate a more favorable climate for the rollout of the Affordable Care Act.

Relying on the latest data available, Health Care Costs 101, part of CHCF's California Health Care Almanac, details how much is spent on health care in the US; which services are purchased; and what proportions are financed by households, government, and business.

Key findings include:

  • In 2011, health care spending reached $2.7 trillion, an average of $8,680 per person.
  • Both health spending and the overall economy grew at similar rates, keeping health care's share of the gross domestic product (GDP) unchanged for the third straight year at 17.9%.
  • Health care's recent 3.9% spending increase is considerably slower than growth posted over the past 20 years (6.3% average annual increase between 1991 and 2011).
  • The slow rates of growth were seen across all spending categories in 2011, and no major categories exceeded 5% per year.
  • Prescription drugs spending increased 2.9% in 2011, a near-record low.
  • Public health insurance paid for the largest share of the nation's care at 39%; private health insurance paid for 33%.
  • Health care spending consumed 46% of federal government revenues and 6% of household income.
  • State Medicaid spending increased dramatically in 2011 as enhanced federal aid to states expired mid-year; state spending on Medicaid grew 22.2%, while federal Medicaid spending fell 7.1%.

An interactive graphic shows the change in health care spending by payer from 1960 to 2011.

The complete report, a quick reference guide, and the data file are available as Document Downloads. Also available are past editions and a California addendum. To request previous editions of these reports, contact CHCF Publishing and Communications.