Healthcare spending grew by 5.3 percent in 2014, as millions of new people with health insurance coverage under the Affordable Car Act and rapidly rising prescription drug prices drove spending upward, according to a study by CMS' Office of the Actuary.
Here are 10 things to know about healthcare spending in 2014.
1. Total U.S. healthcare spending hit $3 trillion in 2014.
2. Fueled largely by spending for new medicines, particularly specialty drugs, spending on prescription drugs grew by 12.2 percent in 2014, compared to 2.4 percent growth in 2013.
3. Total private health expenditures, which represented 33 percent of total healthcare spending in 2014, grew 4.4 percent last year, reaching $991 billion. That's compared to spending growth of 1.6 percent in 2013 — the slowest rate since 1967.
4. The faster rate of growth for private health expenditures was attributable to several factors, including expanding health coverage through the ACA marketplace plans. The insured share of the population increased from 86 percent in 2013 to 88.8 percent in 2014.
5. Medicare spending, which represented 20 percent of total healthcare spending in 2014, grew 5.5 percent last year to $618.7 billion. That's compared to spending growth of 3 percent in 2013.
6. Sixteen percent of national healthcare spending was attributable to Medicaid spending in 2014. Medicaid spending grew 11 percent last year, reaching $495.8 billion, a faster increase than the 5.9 percent growth in 2013.
7. Medicaid spending growth was fueled by coverage expansion under the ACA.
8. Out-of-pocket spending, which includes direct consumer payments such as copayments, deductibles and spending not covered by insurance, grew 1.3 percent in 2014 to $329.8 billion, slower than annual growth of 2.1 percent in 2013.
9. Total healthcare spending grew 1.2 percentage points faster than the overall economy last year, resulting in a 0.2 percentage-point increase in the health spending share of gross domestic product — from 17.3 percent to 17.5 percent.
10. From 2000 to 2009, the decade prior to the ACA, healthcare spending grew by an average of 6.9 percent annually, 2.8 percentage points faster than GDP.
More articles on healthcare finance:
OSU Wexner's operating margin cut in half on CFO's recommendation
8 hospital CFOs in the headlines
Duke University Health, UNC Health Care end fiscal year on high note: 9 things to know