Trends in Healthcare Expenditures 2015

U.S.HEALTHCAREEXPENDITURES2015
Kristin Cooper, Christy Meyer, and Amit Jindal
December 2016

2
Trends in Total Healthcare Spending 2015
Sources: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/dsm-15.pdf
http://content.healthaffairs.org/content/early/2016/11/22/hlthaff.2016.1330.full.pdf
Total US healthcare spending in 2015 increased 5.8% and reached $3.2 trillion, accounting for 17.8% of
the nation’s Gross Domestic Product. The primary drivers of the increase were private health insurance
(+7.2%) and personal health (+6.0%) spending.
$2,494.7
$2,596.4
$2,687.9
$2,795.4
$2,877.6
$3,029.3
$3,205.6
4.0%
4.1%
3.5%
4.0%
2.9%
5.3%
5.8%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
$1,750
$2,000
$2,250
$2,500
$2,750
$3,000
$3,250
2009 2010 2011 2012 2013 2014 2015
National Health Expenditures by Category ($B)
Personal health care Government administration
Net cost of health insurance Government public health activities
Investment Annual Growth

3
Personal Healthcare Expenditures by Category ($B)
$779.7
$822.4
$852.0
$902.7
$937.9
$981.0
$1,036.1
$498.7
$513.1
$536.4
$558.0
$569.5
$597.1
$634.9
$252.7
$253.0
$258.7
$259.1
$265.1
$297.9
$324.6
$135
$140
$145
$147
$149
$153
$157
$102
$105
$107
$109
$110
$113
$118
$67
$71
$74
$77
$80
$84
$89
$191
$199
$204
$216
$223
$234
$251
$88
$91
$95
$97
$101
$104
$108
$- $500 $1,000 $1,500 $2,000 $2,500
2009
2010
2011
2012
2013
2014
2015
Hospital care Physician and clinical services Prescription drugs Nursing/Retirement Care Facilities
Dental services Home health care Other Professional Services & Care Other Medical Products
The 6.0% increase in personal health expenditures in 2015 was driven primarily by significant increases
in prescription drugs (+9.0%), physician/clinical services (+6.3%), and hospital care (+5.6%) spending.
*Callouts mark percentage increases per category that are greater than the total personal health expenditure percentage increase for that year.
+6.3% +9.0% +6.2% +7.1%
+12.4%
+3.9% +3.8% +3.5% +3.5%
+6.0% +4.5% +5.4%
+4.5% +3.9% +4.4%
+5.5% +5.5% +4.4%
+7.4% +8.3%

4
Private Health Insurance & Out-of-Pocket Expenditures ($B)
Hospital care, physician/clinical services, and prescription drugs accounted for 73% of healthcare
expenditures in 2015.
Causes:
• Accelerated growth driven by non-price
factors such as use and intensity of
services drove accelerated growth.
• Growth tempered by lowest hospital
price growth rate seen since 1998, and
slower Medicare spend increase due to
the expiration of certain ACA provisions.
Hospital Care Expenditures
Growth accelerated to 5.6%
and accounted for 38.1% of
personal healthcare spending.
Physician/Clinical Expenditures
Growth accelerated to 6.3%
Causes:
• Accelerated growth driven by non-price
factors such as residual use and intensity
of services.
• Growth tempered by a 1.1% decline in
price growth and expiration of ACA
provision which increased Medicaid
payments to PCPs.
Prescription Drug Expenditures
Causes:
• Growth decelerated following record-
high 2014 spending increases (12.4%).
• Spending increased due to increased
utilization and price of name brand
drugs, and decrease in expired patents
• Generic drug spending increased due to
utilization and 1% average price increase
Growth decelerated to 9.0%
$779.7
$822.4
$852.0
$902.7
$937.9
$981.0
$1,036.1
$600
$700
$800
$900
$1,000
$1,100
2009 2010 2011 2012 2013 2014 2015
$498.7
$513.1
$536.4
$558.0
$569.5
$597.1
$634.9
$400
$450
$500
$550
$600
$650
2009 2010 2011 2012 2013 2014 2015
$252.7 $253.0
$258.7 $259.1
$265.1
$297.9
$324.6
$200
$250
$300
$350
2009 2010 2011 2012 2013 2014 2015

5
Health Expenditures by Source ($B)
Private health insurance expenditures increased 7.2%* and continued to be the largest payer of health
care in the U.S. Out-of-pocket spending increased slowly (+2.6%), though decreased as a share of total
health care expenditures from 13% in 2007 to 11% in 2015.
$293.1
$298.7
$308.5
$317.6
$325.1
$329.7
$338.1
$832.6
$863.1
$895.1
$925.1
$944.9
$1,000.0
$1,072.1
$498.9
$519.3
$546.3
$569.5
$590.4
$618.5
$646.2
$374.4
$397.2
$406.7
$422.7
$445.4
$497.2
$545.1
$90.3
$95.6
$100.1
$102.2
$105.6
$112.6
$121.1
$266.5
$279.8
$281.8
$305.0
$313.1
$320.5
$328.2
$- $500.0 $1,000.0 $1,500.0 $2,000.0 $2,500.0 $3,000.0
2009
2010
2011
2012
2013
2014
2015
Out of Pocket Private Health Insurance
Medicare Medicaid
Other Health Insurance Programs Other Third-Party Payers & Programs and Public Health Activity
+7.2%
+5.8%
+9.7% +7.5%
+11.6% +6.6%
+8.2%
+3.7% +5.4% +3.3%
+4.3%
+4.7%+5.2%
+6.1% +5.9% +5.0%
+6.8% +8.8% +10.1%
+3.7%
*Callouts mark percentage increases per source that are greater than the total health expenditure percentage increase for that year.

6
Private Health Insurance & Out-of-Pocket Expenditures ($B)
In 2015, insurance and out-of-pocket spending continued to reflect impacts of the ACA.
$832.6
$863.1
$895.1
$925.1
$944.9
$1,000.0
$1,072.1
$700
$800
$900
$1,000
$1,100
2009 2010 2011 2012 2013 2014 2015
Causes:
• Increased enrollment associated with coverage expansions
under ACA, especially in employer-sponsored plans (1.4%).
• Increased benefit payments (+7.9%), due largely to hospital and
physician/clinical services spending.
• Potentially less healthy new enrollees, as a whole, may have
used more services and had higher medical costs.
Private Health Insurance Expenditures
Increased 7.2% and continued to be the
largest payer of health care in the U.S.
Out-Of-Pocket Expenditures
Increased slightly at 2.6%, but decreased as
a share of total health care expenditures
from 2007 to 2015.
$293.1
$298.7
$308.5
$317.6
$325.1
$329.7
$338.1
$260
$280
$300
$320
$340
2009 2010 2011 2012 2013 2014 2015
Causes:
• Decline in uninsured rate caused decline in out-of-pocket
expenditures.
• Increase in overall utilization.
• Increased cost sharing associated with high-deductible plans.

7
Medicare & Medicaid Expenditures ($B)
Slowing enrollment rates seen in 2015 caused steady and overall slowing growth rate in both Medicaid
and Medicare expenditures.
Causes:
• High growth continued due to increases in hospital and other
health, residential, and personal care services pursued by some
states to drive delivery system reforms and expand home and
community care offerings.
• Growth rates slowed compared to 2014 due to the expiration of
certain ACA provisions and decreases in prescription drug
spending rates rebounding from record highs in 2014.
Medicaid Expenditures
Increased 9.7% and accounted for 17% of
total national health expenditures. Per
enrollee spending grew 3.8%.
Medicare Expenditures
Increased steadily at 4.5% and accounted for
20% of total health expenditures. Per
enrollee spending grew 1.7%.
Causes:
• Growth slowed due to decelerating spending in fee-for-service
(68% of total) and Medicare Advantage (32% of total). Hospital
and prescription drug spending both decelerated.
• Slower growth was tempered by increases in nursing home and
home healthcare spending rates.
$498.9
$519.3
$546.3
$569.5
$590.4
$618.5
$646.2
$300
$400
$500
$600
2009 2010 2011 2012 2013 2014 2015
$374.4
$397.2 $406.7
$422.7
$445.4
$497.2
$545.1
$300
$400
$500
$600
2009 2010 2011 2012 2013 2014 2015

8
Trends in Total Healthcare Spending – As Share of GDP
Sources: http://content.healthaffairs.org/content/early/2016/11/22/hlthaff.2016.1330.full.pdf, Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics
Group; US Department of Commerce, Bureau of Economic Analysis; and National Bureau of Economic Research Inc.
Historically, the largest increases in health spending have typically occurred around periods of
economic recession. However, the most recent increase in health spending occurred in 2014-15
following the passage of the ACA, about 5 years after the last Great Recession in 2008.
Low GDP growth combined with high health spending growth lead to a significant increase in health
spending as a share of GDP, from 17.3% in 2014 to 17.8% in 2015. In 2014-15, average GDP growth was
4.0%, while health spending growth was 5.5%.

9
Trends in Healthcare Spending - Per Capita
Source: http://content.healthaffairs.org/content/early/2016/11/22/hlthaff.2016.1330.full.pdf
Total US health care spending per capita reached $9,990 in 2015, up 5% from the previous year.
$47,053
$48,436
$49,870
$51,525
$52,843
$54,631
$56,210
2.9% 3.0%
3.3%
2.6%
3.4%
2.9%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
$42,000
$44,000
$46,000
$48,000
$50,000
$52,000
$54,000
$56,000
$58,000
2009 2010 2011 2012 2013 2014 2015
GDP Per Capita
GDP per Capita Annual Growth
$8,141 $8,404 $8,638 $8,915 $9,110 $9,515 $9,990
3.1% 3.2%
2.8%
3.2%
2.2%
4.4%
5.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
$4,000
$6,000
$8,000
$10,000
$12,000
2009 2010 2011 2012 2013 2014 2015
Health Expenditures Per Capita
NHE per Capita Annual Growth

10
Healthcare Cost Sponsors - 2015
In 2015, private sources sponsored 54% of national healthcare costs, while governments sponsored
46%. The federal government and private households each funded over 25% of total healthcare costs
in 2015.
• Federal government spending increased
by 8.9% in 2015 from the previous year.
37% was Medicaid payments, up 12.6%
from 2014.
• State/local government spending
increased by 4.6% in 2015, driven by
Medicaid growth, increased
reimbursement rates, & efforts to
expand home & community-based care.
• Private household spending increased
4.7% in 2015. Out-of-pocket costs
accounted for 28% of private household
spending.
• Increases in spending by private
sponsors (households and businesses)
were primarily driven by increased
contributions to employer-sponsored
private health insurance premiums
Federal
Government
State/Local
Government
Private
Households
Private
Businesses
Other Private
Sources
29%
17%
28%
20%
7%

11
Uninsured Rates - 2015
With the implementation of ACA, the uninsured share of the population decreased 34% from 2013
to 2015.
In the 2-year period from 2014-15:
• 9.7 million people (+2.5%) gained private health insurance
• Direct private enrollment: +6.6 million people
• Employer-sponsored enrollment: +3.0 million people
• 10.3 million people enrolled in Medicaid (+8.4%)
15.0% 15.6% 14.7% 14.3% 14.0% 11.2% 9.1%
85.0% 84.4% 85.3% 85.7% 86.0% 88.8% 90.9%
306.4 309.0 311.2 313.5 315.9 318.4 320.9
0
50
100
150
200
250
300
350
2009 2010 2011 2012 2013 2014 2015
U.S. Population Health Insurance Coverage (millions)
Uninsured Insured

Trends in Healthcare Expenditures 2015

More Related Content

What's hot

Viewers also liked

Similar to Trends in Healthcare Expenditures 2015

Recently uploaded

Trends in Healthcare Expenditures 2015