Industry News

On December 16, 2021, the Centers for Medicare & Medicaid Services (CMS) released their report on the National Health Expenditure Accounts (NHEA). The NHEA measures annual U.S. expenditures for health care goods and services, public health activities, government administration, net cost of health insurance, and investments related to health care. According to the CMS, U.S. health care spending grew 9.7% in 2020 and reached $4.1 trillion or $12,530 per person. As a share of the gross domestic product (GDP), health care spending was 19.7% in 2020, up from 17.6% in 2019. 

In 2020, health care spending for the broad categories of services and products include:

• Hospital care spending increased 6.4% to $1.3 trillion, up from 6.3% in 2019;
• Physician and clinical services spending increased 5.4% to $809.5 billion, up from 4.2% in 2019; and
• Retail prescription drug spending increased 3.0% to $348.4 billion, down from 4.3% in 2019.

In 2020, the growth in federal government spending increased 36.0%, up significantly from 5.9% in 2019. The federal government’s increased spending for health care is mainly due to faster growth in federal expenditures for health care in response to the COVID-19 pandemic. The spending growth was driven by federal financial assistance to health care providers through the Provider Relief Fund and Paycheck Protection Program Loans, increased federal public health activity, and increased federal Medicaid funding. Private businesses’ health care spending declined 3.1% in 2020, down from 3.8% in 2019 while household’s health care spending increased 1.1% in 2020, down from 4.4% in 2019.

Further information is available here.