The actuaries at the Center for Medicare Services do an excellent job of tracking total US health spending and projecting it forward. They have just released their report for 2024, which can be found at the website and in Health Affairs at the link below. Spending is reported as $5.3 trillion, an increase of 7.2% over 2023 spending, which also saw about a 7.4% rise. That is extremely strong growth in a sector largely funded by government, and it is responsible for much of the growth in the federal deficit and debt. Accompanying commentary suggests that utilization increases are responsible for much of the rise in 2024, but we have high spending because of our high prices. Distinguishing the level of spending from the year-to-year increase is helpful. Comparisons to other developed countries indicate that our utilization control is good, but our prices are very elevated.
The spending amounted to $15,474 per person, although as I have noted repeatedly, there is an intense concentration of spending among a relatively small part of the population. Personal health care spending accounts for the vast bulk of total health spending, at $4.5 trillion. This is the health care we all receive. It grew at an even faster 8.9% in 2024. But a lot of health is for government administration–$66 billion; private health insurance administration and profits–$303 billion; public health activities–$158 billion, and investment–$239 billion. There is a huge amount of waste or at least avoidable spending in these categories, which account for around 15% of all health spending. (HA Article)
Within personal health care spending, hospital services acconted for $1.63 trillion; professional and physician services around $1.5 trillion, drugs, $467 billion, dental care, $189 billion, home health care, $169 billion and nursing home care, $220 billion. Private health insurance accounted for $1.64 trillion of this spending, $7676 per person, Medicare for $1.12 trillion, $16779 per person; and Medicaid for $931 billion, $11,050 per person.
Businesses and individuals ultimately paid for $2.77 trillion of the spending, with households accounting for $1.46 trillion, although the reality is that individuals paid every bit of it, directly, through taxes or through increased prices for products and services from the health care costs businesses embed in those prices. Governments paid $2.51 trillion, with the federal government representing $1.65 trillion of that.
A lot of money, a big problem and it is a fair question to ask what we get for it.
Future idea for an article related to this and fraud. Wage depression in the HCBS and long term care community due to the forecasts which will now have to be significantly deflated due to the fraud and claw back.
In the linked article I didn’t find a line item that identifies HC spending associated with Obamacare subsidies. Today I read an article on John Solomon’s website (https://justthenews.com/accountability/waste-fraud-and-abuse/waste-fraud-minnesota-being-paid-taxpayers-outside-state) stating 6.4M people were signed up for Obamacare and subsidies routed thru insurance companies……”The government was sending massive checks to insurance companies who were making windfall profits on behalf of people who didn’t use any health care.” Is there any sense of how much $$$ could be saved by eliminating the type of fraud? Another abuse occurs in MC Advantage plans, For example, in The Villages, FL a provider, The Villages Health System LLC, was found over a 5-yr period to have enrolled benefit recipients and altered their Medicare coding to receive higher CMS benefits routed thru insurers, such as UHC. And, this resulted in >$350M overcharge to CMS. Just dealing with benefits based on manipulated Medical coding & enrollment fraud in this portion of HC benefits might yield more immediate savings, without impacting actual payouts to providers, physicians, or hospitals for “actual care” delivered. You think?