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Health Care Costs 101: Slow Growth Persists

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Health Care Costs 101

Slow Growth Persists

Katherine B. Wilson

The picture of US health spending in 2012 was restrained. It marks the fourth straight year of historically low growth — only 3.7% — and no increase in health care's share of the economy.

July 2014
Who Paid for Health Care over the Past 50 Years?

Even with the slow growth in national health spending in recent years, the US continued to spend a greater percentage of its wealth on health care than any other industrialized nation. In 2012, the US spent an average of $8,915 per person on health care, reaching a total of $2.8 trillion.

Relying on the most recent data available, Health Care Costs 101: Slow Growth Persists 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:

  • The economy grew slightly faster than health spending, resulting in health care's share of the economy remaining stable at 17.2%.
  • In 2010 the elderly population, 65 and over, accounted for one-third of health spending but made up just 13% of the population.
  • Average health care costs for females were 25% more than for males in 2010, primarily due to higher spending in the childbearing years and after age 85.
  • Prescription drug spending grew at its slowest pace on record, increasing less than half a percent in 2012, as generic drugs replaced blockbuster drugs that lost patent protection.
  • Medicare spending grew at a rate of 4.8%, slightly faster than the overall average, while private insurance spending (3.2%) stayed closer to the average.
  • Public health insurance accounted for 39% of health spending, while private health insurance accounted for 33%.
  • Health care spending consumed 42% of federal revenues and 6% of household income.

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.