national health spending in 2012: rate of health spending growth remained low for the fourth...

National Health Spending in 2012: Rate of Health Spending Growth Remained

Low for the Fourth Straight Year

Anne MartinMicah HartmanLekha WhittleAaron Catlin

andThe National Health Expenditure Accounts Team

1

2012 National Health Expenditure Accounts

National health spending increased 3.7 percent in 2012 following 3.6 percent growth in 2011.

National health spending reached $2.8 trillion, or $8,915 per person in 2012.

The share of Gross Domestic Product (GDP) devoted to health care spending fell slightly—from *17.3 percent in 2011 to 17.2 percent in 2012.

*The 2011 health share of GDP was revised due to a large upward revision to GDP

SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group. 2

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

(4.0)

(2.0)

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

12.1 12.8 13.1 13.4 13.3 13.4 13.4 13.3 13.3 13.3 13.4

14.1 14.9

15.4 15.5 15.5 15.6 15.9 16.4

17.4 17.4 17.3 17.2

NHE GDP NHE as a share of GDP

Growth in National Health Expenditures (NHE) and Gross Domestic Product (GDP), and NHE as a Share of GDP, 1990-2012

SOURCES: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group; Department of Commerce, Bureau of Economic Analysis and National Bureau of Economic Research.

Perc

ent

Calendar Years

December 2007- June 2009 Recession

March 2001-November 2001Recession

July 1990-March 1991Recession


Overall Mixed Trends

Faster growth in personal health care (PHC) spending

Slower growth in investment and the net cost of private health insurance; decline in non-commercial research



Price vs. Non-Price Trends

Price growth accounted for a smaller portion of health spending increase in 2012 compared to 2011.

Non-price factors accounted for a larger portion of health spending increase in 2012 compared to 2011.Population growthAge & gender shiftsOther, such as use & intensity of health care goods and services


6

2008 2009 2010 2011 2012 2008 2009 2010 2011 2012-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%5.5%6.0%6.5%

Factors Accounting for Growth in Per Capita National Health Expenditures and Personal Health Care Expen-

ditures, Calendar Years 2008-2012Other nonprice factors Age and sex factors Medical prices Per capita spending growth

Perc

ent

National health expenditures Personal health care expenditures

SOURCE Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group. NOTES Medical price growth, which in-cludes economywide and excess medical-specific price growth (or changes in medical-specific prices in excess of economywide inflation), is calculated us-ing the chain-weighted national health expenditures (NHE) deflator for NHE and the chain-weighted personal health care (PHC) deflator for PHC expendi-tures. As a residual, the category of other nonprice factors includes use and intensity and any errors in measuring prices or total spending.


Trends by Services in 2012

Spending increased at a faster rate:• Hospital care • Physician and clinical services

Spending increased at a slower rate:• Retail prescription drugs• Nursing care facilities



Trends by Payers in 2012

Spending increased at a faster rate:• Medicaid• Out-of-pocket spending

Spending increased at a slower rate:• Private health insurance• Medicare


Affordable Care Act Overall, Affordable Care Act provisions effective for 2010

through 2012 had minimal impact on total national health spending.

Sector-specific provisions: Private health insurance• Pre-existing condition insurance program• Early retiree reinsurance program• Coverage for dependents under age 26• Minimum medical loss ratio

Medicare Program• Reduced payment updates (productivity adjustments)

Retail Prescription Drugs• Medicare drug coverage gap discount program• Medicaid retail prescription drug rebates


The Nation’s Health Dollar ($2.8 Trillion), Calendar Year 2012: Where It Went

Hospital Care32%

Physicians and Clinics 20%

Prescription Drugs9%

Dental Services and Other Professionals

7%

Government Administra-tion and Net Cost of

Health Insurance7%

Investment16%

Nursing Care Facilities and Continuing Care Retire-

ment Communities5%

Other Health, Residential, and Personal Care3

5%Other Medical Products2

3%

Government Public Health Activities3%

Home Health Care3%

1 Includes Research (2%) and Structures and Equipment (4%).2 Includes Durable (1%) and Non-durable (2%) goods.3 Includes expenditures for residential care facilities, ambulance providers, medical care delivered in non-traditional settings (such as community centers, senior citizens centers, schools, and military field stations), and expenditures for Home and Community-based Waiver programs under Medicaid.Note: Sum of pieces may not equal 100% due to rounding.


Annual Growth in Spending by Type of Service, 2011 and 2012

Investment

Durable Medical Equipment

Other Non-Durable Medical Products

Prescription Drugs

Nursing Care Facilities And Continuing Care Retirement Communities

Home Health Care

Other Health Residential And Personal Care

Other Professional Services

Dental Services

Physician And Clinical Services

Hospital Care

National Health Expenditures

0.0 1.0 2.0 3.0 4.0 5.0 6.0

1.4

5.6

1.8

0.4

1.6

5.1

4.5

4.5

3.0

4.6

4.9

3.7

5.7

5.6

3.0

2.5

4.3

4.1

3.3

4.6

2.2

4.1

3.5

3.6

2011 2012

SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group.

• Total spending=$882.3 billion• Spending increased 4.9%• Faster growth in 2012 driven by:

– Private Health Insurance– Medicare – Medicaid

Annual Growth in Hospital Spending, 2008 - 2012

32%


2008 2009 2010 2011 20120.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

5.3

6.6

4.6

3.5

4.9

Annual Growth in Physician and Clinical Services Spending, 2008 - 2012

• Total spending=$565.0 billion• Spending increased 4.6% • Faster growth in 2012 driven by:

– Use & intensity of services – Out-of-pocket spending– Private Health Insurance

20%

SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group.13

2008 2009 2010 2011 20120.0

1.0

2.0

3.0

4.0

5.0

6.0

5.3

3.43.1

4.1

4.6

Annual Growth in Retail Prescription Drug Spending, 2008- 2012

9%


• Total spending=$263.3 billion• Spending increased 0.4%• Slower growth in 2012 driven by:

– Slow growth in prices• Patent expirations

– Increased Generic Dispensing Rate

– Decline in out-of-pocket spending

– Decline in Private Health Insurance spending

2008 2009 2010 2011 20120.0

1.0

2.0

3.0

4.0

5.0

6.0

2.8

4.9

0.4

2.5

0.4

The Nation’s Health Dollar ($2.8 trillion), Calendar Year 2012: Where It Came From

Health In-

surance72%

Out-of-pocket212%

Other Third Party

Payers and Pro-

grams18%

Investment6%

Government Public Health Activities

3%

1 Includes worksite health care, other private revenues, Indian Health Service, workers’ compensation, general assistance, maternal and child health, vocational rehabilitation, Substance Abuse and Mental Health Services Administration, school health, and other federal and state local programs.2 Includes co-payments, deductibles, and any amounts not covered by health insurance. Note: Sum of pieces may not equal 100% due to rounding.

VA, DOD, and CHIP (Titles XIX and Title XXI)

4%

Private Health

Insurance33%

Medicare20%

Medicaid (Title XIX) State and Local 7%

Medicaid (Title XIX)

Federal9%

Health Insurance


Annual Growth in Spending by Source of Funds, 2011 and 2012

Other Third Party Payers and Programs

Department of Defense

Department of Veterans Affairs

CHIP (Title XIX and Title XXI)

Medicaid (Title XIX)

Medicare

Private Health Insurance

Out of pocket

National Health Expenditures

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

6.8

1.7

3.6

5.3

3.3

4.8

3.2

3.8

3.7

3.7

3.8

6.1

3.8

2.4

5.0

3.4

3.5

3.6

2011 2012


Private Health Insurance: Growth in Enrollment, Premiums, and Benefits, 2008 – 2012

2008 2009 2010 2011 2012

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

-0.8%

-3.2%

-1.8%

0.5% 0.4%

3.9%3.1% 3.2% 3.4% 3.2%

4.9%4.3%

2.3%

3.4%3.6%

Total PHI: Growth in Enrollment, Premiums, and Benefits

PHI Enrollment Premiums Benefits


33%

• Total Spending = $917.0 billion• Spending increased 3.2%• Enrollment reached 188 million• Slightly slower premium growth

in 2012 driven by:– Increased enrollment in

high-deductible plans– Lower growth in the net

cost of insurance

Private Health Insurance: Growth in Per Enrollee, Premiums, and Benefits, 2008 – 2012


2008 2009 2010 2011 20120%1%2%3%4%5%6%7%8%9%

10%

4.7%

6.5%

5.1%

2.8% 2.7%

5.7%

7.7%

4.2%2.9% 3.2%

Per Enrollee: Growth in Premiums and Benefits

Premiums per enrollee

Benefits per enrollee

• Premium and medical benefit per enrollee trend remained low

• Relatively flat premium per enrollee trend

• Medical benefit spending per enrollee trend:– Slightly faster due to an

acceleration in spending for hospital care and physician and clinical services

– Partially offset by a decline in retail prescription drug spending

33%

Medicare: Growth in Total Expenditures and Enrollment, 2008 – 2012

2008 2009 2010 2011 20120%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2.6% 2.4% 2.5% 2.5%

4.1%

8.1%

6.8%

4.1%

5.0% 4.8%

5.4%

4.3%

1.6% 2.5%

0.7%

Medicare Enrollment Medicare Spending Per enrollee

20%


• Total Spending = $572.5 billion• Spending increased 4.8%• Slightly slower growth in 2012

was driven primarily by a decline in Nursing Home Care spending

Medicare: Growth in FFS and Medicare Advantage Expenditures and Enrollment, 2008 – 2012

2008 2009 2010 2011 2012

-5%

0%

5%

10%

15%

20%

25%

-0.4%

0.2% 1.5% 1.5%2.1%

4.7% 4.2% 3.9% 4.3%

2.7%

5.1%

4.0% 2.4% 2.7%

0.6%

Fee-for-Service

FFS Enrollment FFS SpendingPer FFS enrollee

2008 2009 2010 2011 2012

-5%

0%

5%

10%

15%

20%

25%

15.0%

10.5%

5.6% 5.4%

10.0%

21.1%

15.7%

4.6%

7.0%

10.9%

5.3% 4.7%

-1.0%

1.6% 0.8%

Medicare Advantage

MA Enrollment MA Spending Per MA enrollee


20%

Medicaid: Growth in Total Expenditures and Enrollment, 2008 – 2012


15%

21

2008 2009 2010 2011 2012-2%

0%

2%

4%

6%

8%

10%

3.5%

7.3%

4.9%

3.2%

1.9%

5.8%

8.8%

6.1%

2.4%3.3%

2.2%1.4% 1.1%

-0.7%1.3%

Total Medicaid Expenditures and Enrollment

Enrollment Spending Per enrollee

• Total Spending = $421.2 billion• Spending increased 3.3%• Slightly faster growth in 2012

driven by increased spending growth for: – Hospital care– Other health, residential, and

personal care• Spending growth in 2011 and

2012 historically low (excluding 2006) due to:– Slowdown in enrollment

growth– States efforts to control costs

Medicaid: Growth in Total, Federal, and State & Local Expenditures,

2008 – 2012


2008 2009 2010 2011 2012

5.8%8.8%

6.1%

2.4% 3.3%

9.6%

21.9%

7.8%

-7.2%-4.2%

0.7%

-10.0%

2.7%

22.0%

15.0%

Federal and State & Local Med-icaid Expenditures

Total Federal State/local

15%

Distribution and Annual Growth by Type of Sponsor

2010 2011 20120%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

20% 21% 21%

28% 28% 28%

7% 7% 7%

28% 27% 26%

16% 17% 18%

Distribution of National Health Expenditures by Type Of Sponsor,

2010 - 2012

State and local government

Federal gov-ernment

Other Private Revenues

Households

Private Business

2008 2009 2010 2011 2012

-5%

0%

5%

10%

15%

20%

Annual Growth in Spending by Sponsor, 2008 - 2012

State and Local GovernmentFederal GovernmentPrivate BusinessHouseholds


Note: Sum of pieces may not equal 100% due to rounding.

2012 National Health Expenditure Accounts:Summary

National Health Expenditures increased 3.7 percent in 2012. National Health Expenditures reached $2.8 trillion, or $8,915 per person in 2012. National Health Expenditures represented a 17.2 percent share of Gross Domestic

Product (GDP). Spending grew faster in 2012 for:

• Hospitals • Physician and clinical services • Medicaid • Out-of-pocket

Spending grew at a slower rate in 2012 for:• Prescription drugs • Nursing care facilities • Private health insurance • Medicare

Sponsor• Shares have remained stable except for the end of the temporary shift from

federal to state and localSOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group. 24

national health spending in 2012: rate of health spending growth remained low for the fourth...

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