U.S. healthcare spending reached $3.5 trillion in 2017, or $10,739 per person, according to an annual report released Thursday by the Centers for Medicare and Medicaid Services.
Healthcare spending growth was 3.9 percent for the year, below the 4.8 percent rate in 2016 and near the slow rates seen in the years just after the financial crisis.
The findings, published in the journal Health Affairs, reflect spending on healthcare across the board, including from private health insurance, the government, employers, and individuals.
CMS actuaries attribute the slowdown to people using less healthcare goods and services, including fewer visits to the doctor’s office and to hospitals, and to lower spending on prescription drugs.
The share of gross domestic product devoted to healthcare spending was 17.9 percent in 2017, similar to the share recorded in 2016. The share was largely unchanged because the economy grew 4.2 percent in 2017, compared to just 2.7 percent a year earlier.
During the post-recession years from 2008 to 2013, the rate of growth in healthcare spending averaged 3.8 percent. This amount represented a historic low and was often touted by officials under the Obama administration. Spending accelerated in the two years that immediately followed, however, largely because the Affordable Care Act, or Obamacare, went into effect, and also because spending on drugs reached a record high.
During those years, healthcare spending growth averaged of 5.5 percent, outpacing GDP growth.
The report shows that households and the federal government pay the highest shares of healthcare services, at 28 percent each. They are followed by private businesses, which account for 20 percent of healthcare spending, and then by state and local governments, which account for 17 percent of spending. The rest comes from other private sources.
Spending by the federal government slowed largely because most of the Obamacare Medicaid expansion already happened, and so fewer people were enrolled into the program than the years that immediately preceded it. Most states have expanded Medicaid to people making under about $17,000 a year, and the federal government picked up the full cost from 2014 to 2016.
