(Reuters) — U.S. healthcare spending last year increased 3.6% over 2012, the smallest rate of growth since 1960, government officials announced today.
The modest increase, down from the 4.1% increase from 2011 to 2012, continued a trend that began with the 2007-2009 recession, and is a dramatic change from the double-digit growth of a decade ago. It fed hopes that more price-conscious consumers, as well as policy initiatives like Obamacare, are reining in U.S. healthcare spending, the world’s highest and a drag on both the federal budget and corporate balance sheets.
Per capita growth slowed even more, from 3.4% in 2012 to 2.9% last year, according to the Centers for Medicare & Medicaid Services. The analysis appears in the journal Health Affairs at according to the Centers for Medicare & Medicaid Services.
Healthcare spending in 2013 totaled $2.9 trillion, or $9,255 per person. It accounted for 17.4% of gross domestic product, the same percentage as it has since 2009.
The analysis found that prices of doctor visits, hospital care, nursing homes and other healthcare services grew 1.3%, more slowly than the overall inflation rate of 1.5%.
That modest increase likely reflects pressure that both private insurers and Medicare are putting on providers, as well as President Barack Obama’s healthcare reform, which put checks on what providers charge Medicare, the government program for the elderly and disabled. Learn more at http://www.abetterwayinhomecare.com/
Americans used hardly any more medical services in 2013 than in 2012, despite the aging and growth of the population. Use of such services rose 1%, after a 1.2% rise in 2012, largely due to lower growth in hospital care.
The historically small rise in healthcare spending occurred across the board, in both private health insurance and Medicare.
Premiums for private insurance rose 2.8% compared to 4% in 2012, reaching $961.7 billion. What private insurers paid out in claims ($846 billion) also rose more slowly: 2.8% vs. 4.4% in 2012, largely because of slower growth in spending for hospitals and doctors.
Medicare spending rose 3.4%, compared to 4% growth in 2012, to $585.7 billion. Spending by the Medicaid program for the poor, however, rose 6.1%.
CMS warned that healthcare spending will grow more sharply if economic growth accelerates. “Historical evidence suggests it will,” said statistician Micah Hartman.