24 Health Care Spending Statistics That Will Shock You in 2021

The USA is infamous for the inequality in terms of health care. It’s the only developed country where medical costs can cause bankruptcy among its citizens. In fact, one of the most common reasons for declaring bankruptcy in the USA is medical debt.

The reason for health care inequality in the USA is simple — Americans have to rely on expensive private insurance to receive health care. And even with insurance, health care is still far from affordable.

However, health care spending statistics do show that Americans with higher income are more likely to be in better health than low-paid citizens.

No surprises here.

Let’s take a look at some stats and facts that show how much Americans spend on health care:

Health Care Spending Statistics (Editor’s Pick)

  • The number of insured citizens decreased by 0.4% in 2019.
  • Private health insurance spending reached $1.2 trillion in 2019.
  • US health care spending decreased by 2% in 2020.
  • The USA spends a 5% larger share of GDP compared to other OECD countries.
  • Private health care spending in the USА is 3 times higher than the average.
  • National health spending is estimated to reach $6 trillion by 2027.

Those are quite the numbers!

But wait.

There’s more from where that came from.

Health Care Spending Statistics from 2019 and 2020

The US Centers for Medicare and Medicaid Services (CMS) is not expected to release official 2020 spending figures until the end of 2021.

So, let’s check out the most recent government stats and preliminary figures about medical costs.

1. US health care spending amounted to $3.8 trillion in 2019.

(Source: Centers for Medicare and Medicaid Services)

Health care spending in 2019 reached a staggering amount of $3.8 trillion. Divided by person, the cost equals $11,582.

The growth of 4.6% is the same as that in 2018 and larger than in 2017 when spending climbed 4.2%. The increase was attributed to growth in personal healthcare spending on hospital care and other clinical services.

2. The number of insured citizens decreased by 0.4% in 2019.

(Source: Centers for Medicare and Medicaid Services)

The latest official health care spending statistics show that the number of citizens with health insurance is declining. In 2019, 90.3% of the population was insured. Compared to 2018, the percentage is lower, as the previous year, 90.6% of the population had insurance.

3. Hospital care spending reached $1.2 trillion in 2019.

(Source: Centers for Medicare and Medicaid Services)

Hospital care spending increased by 6.1% in 2019. The total amount spent on hospital care services equaled $1.2 trillion. If we look at cost statistics regarding the type of product or service, hospital care spending represents 31% of health care costs. It’s approximately the same amount of money spent on health insurance. More on that later.

Hospital care services include, but are not limited to:

  • room and board
  • care provided by resident physicians
  • inpatient pharmacy

Unsurprisingly, hospitals charge for all of this.

4. Physician services increased by 4.6% in 2019.

(Source: Centers for Medicare and Medicaid Services)

If we do a breakdown of healthcare costs by type of service and product, then with $772.1 billion spent in 2019, physician and clinical services represent the second-largest share of the expenses in this category. This is a smaller increase compared to the 2018 growth of 4%.

5. Spending on prescription drugs reached $370 billion in 2019.

(Source: Centers for Medicare and Medicaid Services)

We can notice a general increase in the cost of health care spending in the US. The cost of prescription drugs is no different. In 2019, spending on prescription drugs increased by 5.7%, compared to the 3.8% growth in 2018.

6. In 2019, $193.6 billion were spent on health, residential, and personal care services.

(Source: Centers for Medicare and Medicaid Services)

Those $193.6 billion covered costs for medical care in:

  • schools
  • worksites
  • residential care facilities
  • substance abuse facilities
  • senior citizens centers
  • military field stations
  • others

Those health care expenditures increased by 1.2% in 2019, following a 3% increase in 2018.

7. Nursing care facilities expenses grew by 3.3%.

(Source: Centers for Medicare and Medicaid Services)

In 2019, $172.7 billion was spent on nursing care facilities and continuing care retirement facilities. This marks a 3.3% growth. That’s quite impressive, compared to the increase of 2.3% in 2018.

8. Annual healthcare costs of dental services increased by 4.2%.

(Source: Centers for Medicare and Medicaid Services)

In 2019, dental care spending grew by 4.2%. The previous year, the increase was 4.8%, while the total amount spent equaled $143.2 billion. The largest share of the costs, or 43% to be exact, is attributed to private health insurance. Out-of-pocket spending represented 42% of the costs. It includes deductibles and any other costs not covered by insurance.

9. There was a home health care cost increase of 7.7% in 2019.

(Source: Centers for Medicare and Medicaid Services)

Home health care addresses only the care provided to patients by medical professionals in their homes. The total expenses in 2019 were $113.5 billion. In 2018, home care spending increased by 5.2%. In 2019, this type of spending climbed 7.7%.

10. Spending on other professional services grew by 6.5%.

(Source: Centers for Medicare and Medicaid Services)

This category includes money spent on chiropractors, podiatrists, optometrists, physical therapists, speech therapists, etc.

If we look at health care costs by year, it’s obvious that costs are growing. The percentage is highest for other professional services. The amount spent in 2019 reached $110.6 billion, marking a 6.5% increase — the same as in 2018.

11. Private health insurance spending reached $1.2 trillion in 2019.

(Source: Centers for Medicare and Medicaid Services)

Еveryone looking at healthcare statistics is wondering, ‘How much do Americans pay for health insurance?’. Well, the answer is a lot. To put that into dollars – $1.2 trillion.

The costs rose 3.7% in 2019, following an even more significant increase of 5.6% in 2018. As always, this is attributed to the growing cost of private health insurance, following the health insurance tax. The biggest share of national health spending is attributed to private health insurance.

12. Spending on Medicare reached $799.4 billion in 2019.

(Source: Centers for Medicare and Medicaid Services)

The amount spent on Medicare might not be close to that of private health insurance, but it represents 21.6% of spending by sources of funds. In 2019, there was an increase of 6.7%. And back in 2018, spending grew by 6.4%.

13. Health care expenditures related to Medicaid increased by 3% in 2019.

(Source: Centers for Medicare and Medicaid Services)

Medicaid expenditures increased by 2.9%, reaching $613.5 billion. The previous year there was a similar increase of 3.1%. Likewise, this is attributed to the higher net cost of insurance.

14. Out-of-pocket spending reached $406.5 billion in 2019.

(Source: Centers for Medicare and Medicaid Services)

Out-of-pocket spending is defined as all of the expenses consumers have that aren’t covered by their private health insurance. They include coinsurance, deductibles, etc.

So, US health care expenditures that aren’t covered by private health insurance grew by 4.6% in 2019. The year before, there was a 3.8% rise in out-of-pocket spending.

15. US health care spending decreased by 2% in 2020.

(Source: Altarum)

According to a preliminary analysis released by Altarum, the amount of money Americans spent on healthcare declined in 2020 for the first time since at least 1960, when CMS started recording national healthcare expenditures.

Specifically, national health spending in 2020 was 2% lower than in 2019, a decline of about $75.8 billion.

The main contributors to the unprecedented decline were the decreases in-hospital care (7%) and dental care (20.2%) spending. And these could be explained by the coronavirus pandemic forcing hospitals and patients to delay non-emergency treatments and elective medical procedures.

Health-Spending-Historic-Decline-Altarum

(Image source: Altarum)

16. 30.4 million Americans had no health insurance in 2020.

(Source: Statista)

In the first half of 2020, there were 30.4 million US citizens with no health insurance.

The share of Americans without health insurance was steadily decreasing until 2015 but has been increasing since 2017. The Tax Cuts and Jobs Act of 2017 caused this change because it repealed the individual mandate, which penalized individuals for failing to maintain health coverage.

17. The share of GDP spent on health care equaled 18% in 2020.

(Source: Statista)

The current gross domestic product (GDP) is estimated to be close to $21 trillion. Health care costs represented 17.9% of the GDP in 2017. In 2018, it decreased slightly, by 0.2%. In 2019, the percentage of GDP spent on health care was 17.7%. And in 2020, it climbed back up to 18%.

By 2028, it is expected that health care spending in the US will reach nearly 20% of the nation’s GDP.

US Spending on Health Care Compared to Other Countries

The statistics below compare the medical costs of the USA with other developed countries, members of the Organisation for Economic Co-operation and Development (OECD).

17. Health care costs per person in the United States are 41% higher than in Switzerland.

(Source: Health System Tracker)

Compared to other OECD countries, the USA has the highest healthcare-related expenses. According to 2019 data, the second OECD country with the highest health care expenses is Switzerland. And yet, Swiss citizens spent significantly less on health care than US citizens. 42% less, to be exact.

18. OECD countries have almost 50% lower health care expenditures than the USA.

(Source: Health System Tracker)

According to OECD 2019 health care statistics, the average yearly amount citizens spend on health care is $5,697. It was estimated that in 2019, the average amount US citizens spent on health care was $10,966.

19. The USA spends a 5% larger share of GDP compared to other OECD countries.

(Source: Health System Tracker)

Until the 1970s, the rate at which health care expenses increased in the USA was approximately the same as the average in other OECD countries. That means 6% and 5% respectively. However, the health care cost increases since 1980 have taken the average growth rate of the USA significantly higher than other wealthy countries.

During the 1980s, the average growth rate in OECD countries was 7%. Noticeably lower than the 10.1% growth rate of the USA.

In 2019, health care expenses represented 17% of the national GDP. Switzerland – the second OECD country ranked by health care expenses –  spent 12% of the GDP on health care.

20. The annual growth rate of expenses is 0.2% higher in the USA compared to other OECD countries.

(Source: Health System Tracker)

According to OECD health care statistics, health care cost increases by year have slowed down the past few years.

During 2000 and 2005, the average annual growth rate of health care expenses in the US was 7.2%. Other countries faring similarly to the USA in terms of wealth, had a 5.6% annual growth rate.

The following 10 years, it seemed that the other OECD countries caught up with the USA. In the period between 2005 and 2010, the growth rate was 4.3% for the USA and 5.3% for other countries. From 2010 to 2015, the USA growth rate was again lower than that of other OECD countries – 3.7% compared to 4.4%.

However, health care spending statistics from 2015 to 2019 show that once again, the USA has the highest annual growth rate when it comes to health care – 4.1% compared to the average of 3.9%.

21. Private health care spending in the USА is three times higher than the average.

(Source: Health System Tracker)

Public health care spending in the US is similar to that of other OECD countries. In 2019, public expenditures on health care represented 17% of the GDP. In Switzerland, the next highest comparable country, the percentage was 12%. Similarly, in Germany, public spending on health care represented 12% of the national GDP. So, we can say that public health care expenditures in the United States are approximately the same as in other developed countries.

However, when it comes to private spending, the share of GDP is three times higher than the average of other OECD countries. Namely, private spending represents 8.8% of the GDP. The average for other countries is 2.7% of GDP.

Private spending gradually reached 8.8% of GDP since the 1970s. Back then it represented only 3.9% in the USA. To put things into perspective, private spending in other countries increased from 1.4%, reaching 2.7% of GDP in 2016.

Forecasting Future Health Care Expenditures in the USA

And what does the future hold for medical expenses in the USA? Let’s find out.

22. National health spending is estimated to reach $6 trillion by 2027.

(Source: Centers for Medicare and Medicaid Services)

The Centers for Medicare and Medicaid Services estimated that by the year 2027, national health spending would reach $6 trillion. The annual growth rate is projected to be 5.7%. Currently, health care expenses in the US represent 17.7% of GDP. It is expected to reach 19.4%.

23. Spending on prescription drugs is estimated to grow at an annual average of 6.1%.

(Source: Centers for Medicare and Medicaid Services)

Due to using new prescription drugs and more frequent treatment of chronic conditions, spending on prescription drugs is expected to increase, much like a general health care cost increase. This is due to many factors, like the introduction of new prescription drugs, for example.

24. Hospital spending is expected to increase at an annual average of 5.7% until 2027.

(Source: Centers for Medicare and Medicaid Services)

Along with Medicare and Medicaid spending, hospital spending has grown too. This is attributed to the increasing number of enrollees. It is estimated that higher wages will also contribute to hospital spending between the years 2020 and 2027.

25. It is projected that spending on physician services will grow at an annual rate of 5.4%.

(Source: Centers for Medicare and Medicaid Services)

As previously mentioned, the increase in wages is expected to contribute to the higher cost of medical care in the USA. When it comes to physician and clinical services, it is estimated that Medicare spending will increase at a higher rate than private health insurance. This is due to a generational shift. The boomer generation is expected to switch from private health insurance to Medicare. So, increased demand for medical care from older generations is also expected.

How much does the US spend on health care?

The USA is a global leader and is considered one of the most developed countries. However, there’s a dark side to it. Unaffordable medical care draws a grim picture. The majority of Americans dread visiting a doctor because they aren’t sure whether they will be able to foot the bill. Employers are contributing less to the health insurance of their employees, which is becoming more and more expensive each year.

Health care spending statistics show that the gap between citizens that can afford regular medical care and those that can’t will only widen with time. Medical expenses are high enough to cause lifelong financial issues for citizens. The USA is probably the only wealthy country where the percentage of GDP spent on medical costs is almost 20%. A simply unacceptable fact.

ABOUT AUTHOR

After I got my degree in translation and interpreting, I started working in a typical office. To get away from my nine-to-five job, I ventured into freelance writing. One thing led to another, and I ended up creating content for SpendMeNot. I have been involved with this site ever since its launch — first as a writer and now as a content strategist. When not busy with publication planning, I like blogging. I just hate writing bios so that’s all from me, folks.

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