CMS: National health spending up 4.6% in 2019

U.S. spending on health care grew 4.6% in 2019, similar to 2018 but slightly more than overall growth in the economy, the Centers for Medicare & Medicaid Services reported today in Health Affairs. The data precedes the COVID-19 pandemic and does not reflect the pandemic’s effect on health care spending. On a per capita basis, national health spending grew 4.1% in 2019, reflecting faster growth in the residual use and intensity of health care goods and services and slower growth in medical prices, CMS said. Spending grew 6.2% for hospital care; 5.7% for retail prescription drugs, which excludes the cost of inpatient drugs; and 4.1% for physician and clinical services in 2019. Faster growth in spending for medical goods and services was offset by a decline in the net cost of health insurance due to Congress’ suspension of the health insurance tax for 2019, CMS said.

“Health care spending in 2019 increased at about the same rate as it had in 2018 and was similar to the average annual growth since 2016,” said Anne Martin, an economist in the CMS Office of the Actuary and lead author on the article. “This relative stability in health care spending growth over the last four years preceded the COVID-19 pandemic in 2020. The full impact of the pandemic on the health care sector is still not known, but it will certainly have profound consequences on the provision and consumption of health care in 2020 and perhaps beyond.”

Experts predict that 2020 spending trends will be very different than those reported today. Altarum projects that hospital spending has declined 4.1% since January 2020, as hospital volumes remain low due to the COVID-19 pandemic.