US Health Spending Reaches $4.3 Trillion In 2021 - medtigo



US Health Spending Reaches $4.3 Trillion In 2021

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According to figures issued by the Centers for Medicare & Medicaid Services on Wednesday evening, national health expenditures increased by 2.7% last year.  

As per MMM Online, national health expenditures hit $4.3 trillion, averaging $12,914 per person, despite slower growth than the 10.3% increase in 2020. CMS ascribed the slower growth to a drop in federal COVID-19 funding, stating that this more than counterbalanced the impact of increased usage of healthcare products and services and insurance coverage in 2021.  

The spending connected with COVID-19 supplemental funding, which includes the Provider Relief Fund and the Paycheck Protection Program, and other federal programs, decreased by 62.7% annually, from $193,1 billion to $71.9 billion.  

Anne B. Martin, an economist in the CMS Office of the Actuary, wrote in Health Affairs, “The trends in health care spending in 2021 are linked to the many unique impacts of the COVID-19 pandemic, including the substantially reduced federal COVID-19 supplemental and public health expenditures and an increase in the use of health care goods and services as people sought care at a higher rate than in 2020.”  

Last year, hospital care (31% share), physician and clinical services (20% share), and retail prescription medications (9% share) accounted for the greatest proportion of healthcare expenditures. 

The 7.8% increase in prescription drug expenditures to $378 billion significantly outpaced the 3.7% growth rate projected for 2020. This faster growth was attributed by CMS to an increase in the usage of prescription medications.  

Private health insurance accounted for 28% of health expenditures, followed by Medicare at 21%, Medicaid at 17%, and out-of-pocket spending at 10%. Significantly, the number of uninsured Americans decreased for the second year in a row as enrollment in Medicaid, and private health insurance grew.  

After declining in 2020, the U.S. gross domestic product climbed by 10.7% in 2021, and healthcare’s share of the economy decreased from 19.7% to 18.2% during the same period. CMS stated that this is still greater than the 17.6% reported in 2019. 

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