U.S. healthcare spending growth slowed last year

Healthcare spending in the U.S. grew by 3.6 percent in 2013, according to a study published in Health Affairs.

Overall healthcare spending totaled $2.9 trillion and averaged $9,255 per person, according to Micah Hartman, a statistician for the Centers for Medicare and Medicaid Services (CMS), and colleagues.

The authors said overall healthcare spending growth decelerated 0.5 percentage points in 2013 when compared to 2012, attributable to slower growth in both private health insurance and Medicare. Additionally, the researchers found that private health insurance premium growth slowed from 4 percent in 2012 to 2.8 percent in 2013.

The authors noted two pieces of legislation that affected growth trends last year.

The Affordable Care Act (ACA), enacted in 2010, slowed spending growth by adjusting fee-for-service payments, reducing Medicare Advantage base payment rates, increasing Medicaid prescription drug rebates and implementing the medical loss ratio requirement for private insurers.

The budget sequestration implemented in March of 2013 also resulted in an across-the-board 2 percent reduction in Medicare benefits and lower spending for federal research and public health activities among other federal programs.

“More notable provisions of the ACA, such as those related to the health insurance Marketplaces and the Medicaid expansion, will affect the future health care spending trend through the expansion of health insurance to people who were previously uninsured and the availability of plans with more comprehensive benefits for those who previously had coverage,” Hartman and colleagues wrote.

At the same time, the authors wrote, outside forces will continue to keep medical price growth low for programs like Medicare as well as shifts to private insurance coverage with higher deductibles.

One area that experienced accelerated growth was spending for retail prescription drugs, which grew 2.5 percent to $271.1 billion, compared to just 0.5 percent growth in 2012, largely due to the “patent cliff” when $35 million worth of blockbuster drugs lost patent protection and became available as generics.

Looking forward, the authors expect growth to speed up once more, despite changes on the horizon.

“The key question is whether health spending growth will accelerate once economic conditions improve significantly; historical evidence suggests that it will,” Hartman and colleagues wrote. “However, in the near term, the health sector will undergo major changes that will have a substantial impact on the consumers, providers, insurers, and sponsors of health care.”