U.S. spending on health care grew 3.9 percent in 2017, down from 4.8 percent in 2016 and less than the growth in the overall economy, primarily due to slower growth in spending for hospital care, physician and clinical services, and retail prescription drugs – a category that excludes inpatient drugs, the Centers for Medicare & Medicaid Services reported today in Health Affairs. Federal spending on health care slowed to 3.2 percent, largely due to lower growth in Medicaid spending. Private health insurance spending also slowed due to slower growth in medical benefits and the suspension of the health insurance provider fee. Slower growth in fee-for-service Medicare offset faster growth in spending for Medicare private health plans as more beneficiaries enroll in Medicare Advantage.
 
Ashley Thompson, AHA senior vice president for public policy, said, “These numbers reflect the efforts made by hospitals and health systems to contain costs. They have also managed to slow price growth to under 2 percent during each of the last four years – despite an increased demand for emergency care due to major natural disasters and epidemics. Making care more affordable is a big challenge, but hospitals are tackling it head on to help consumers.”