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CMS reports growth in U.S. health spending remained low in 2012

January 10, 2014

U.S. spending on health care grew 3.7% in 2012 to $2.8 trillion, marking the fourth straight year of low growth, the Centers for Medicare & Medicaid Services (CMS) reported on Jan. 6.

In addition, health care spending as a share of the economy declined slightly to 17.2% in 2012 compared 17.3% in 2011.

“For the second straight year, we have seen overall health care costs grow slower than the economy as a whole,” said CMS Administrator Marilyn Tavenner.

Spending for hospital care increased 4.9% in 2012, 1.5 percentage points more than in 2011, but still well below historical averages. Spending also accelerated in 2012 for physician and clinical services (4.6%), Medicaid (3.3%) and out-of-pocket expenditures (3.8%), according to the annual report issued by CMS.

Medicare spending growth slowed slightly in 2012, increasing by 4.8% compared to 5.0% in 2011. In addition, Medicare enrollment increased 4.1% in 2012 as the first baby boomers became eligible for the program in 2011. This marked the largest one-year
enrollment increase in 39 years.

The report also found slower growth in spending on prescription drugs and skilled nursing facilities in 2012.

The four years of overall low growth in health spending marked the lowest annual rates recorded in the 53 years the government has been collecting such data.

To access the full report from CMS, click on:
http://tinyurl.com/6scyo8n.

An article written by CMS economists appears in the January issue of
Health Affairs. Visit http://tinyurl.com/n2uns73 to access the article.

By Pete Davis