CMS: National health spending growth slows to 4.3% in 2016

U.S. spending on health care grew 4.3% in 2016, down from 5.8% in 2015, primarily due to slower growth in spending for retail prescription drugs, hospital care, and physician and clinical services, the Centers for Medicare & Medicaid Services reported today in Health Affairs. Spending growth slowed for all three major payers – private health insurance, Medicaid and Medicare. For private health insurance and Medicaid, the slower growth was influenced by decelerated enrollment growth, while Medicare spending slowed because of lower per enrollee growth rates. “Over the last decade, the U.S. has experienced unique events that have affected the health care sector, including the most severe economic recession since the Great Depression, major changes to the health care system because of the [Affordable Care Act], and historic lows in medical price inflation,” said Micah Hartman, a statistician in CMS’s Office of the Actuary and lead author of the study. “In 2016, the slowdown in health care spending followed significant insurance coverage expansions under the ACA and very strong growth in retail prescription drug spending in 2014 and 2015.”