Report: US health spending hits $3.5T but growth slows

The nation’s health care tab hit $3.5 trillion last year, or $10,739 per person, the government reported Thursday. But behind those staggering figures was some fairly good news:

The rate of growth slowed for the second year in a row, according to economic experts at the federal Health and Human Services department.

Health care spending increased by 3.9 percent in 2017, following a 4.8 percent increase in 2016.

Private insurance spending grew more slowly in 2017, and so did Medicaid, while Medicare costs grew at about the same rate. The overall economy grew faster than health spending.

If moderate growth can be maintained, that would make the U.S. health care system more manageable for families, employers and government.

In recent years, insurance coverage expansion under former President Barack Obama and large increases in prescription drug spending had led to faster growth.

But the report found a slight dip in coverage last year and a minimal increase in prescription drug spending, less than half of 1 percent. It was the slowest increase in drug costs since 2012. The spike caused by the introduction of expensive new medications for hepatitis C infection has passed, but it’s too soon to tell if a new trend has started.

The per capita spending number of $10,739 is an average across the entire population. In actuality, the sickest patients account for the vast majority of health care costs. Five percent of the population accounts for nearly half of total spending.

The last decade has seen a significant slowdown in the growth of U.S. health care spending, the report found. Annual increases averaged 4.3 percent from 2008-2017, compared with 7.3 percent from 1998-2007. But that doesn’t mean the nation has solved its problem of high health care costs.

“For a health sector that now accounts for nearly one-fifth of the US economy, future increases in health care expenditures will likely lead to policy decisions focused on affordability and sustainability,” the report concluded. It was published online by the journal Health Affairs.

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John Mangalonzo (john@localvoicemedia.com) is the managing editor of Local Voice Media’s Virginia papers – WYDaily (Williamsburg), Southside Daily (Virginia Beach) and HNNDaily (Hampton-Newport News). Before coming to Local Voice, John was the senior content editor of The Bellingham Herald, a McClatchy newspaper in Washington state. Previously, he served as city editor/content strategist for USA Today Network newsrooms in St. George and Cedar City, Utah. John started his professional journalism career shortly after graduating from Lyceum of The Philippines University in 1990. As a rookie reporter for a national newspaper in Manila that year, John was assigned to cover four of the most dangerous cities in Metro Manila. Later that year, John was transferred to cover the Philippine National Police and Armed Forces of the Philippines. He spent the latter part of 1990 to early 1992 embedded with troopers in the southern Philippines as they fought with communist rebels and Muslim extremists. His U.S. journalism career includes reporting and editing stints for newspapers and other media outlets in New York City, California, Texas, Iowa, Utah, Colorado and Washington state.