23+ Health Care Spending Statistics That Will Shock You in 2020

The USA is infamous for the inequality in terms of health care. It is the only developed country where medical costs can cause bankruptcy amongst 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 incomes are more likely to be in better health than low-income 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 0.2%.
  • Spending on prescription drugs reached $335 billion in 2018.
  • Private health insurance spending reached $1.2 trillion in 2018.
  • The USA spends a 5% larger share of GDP compared to other OECD countries.
  • Private health care spending in the USA 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 2018

First, let’s check out the most recent government stats about medical costs.

1. US health care spending amounted to $3.6 trillion in 2018.

(Source: Centers for Medicare and Medicaid Services)

Health care spending in 2018 reached a staggering amount of $3.6 trillion. Divided by person, the cost equals $11,172.The growth of 4.6% is even larger than that in 2017 when spending increased by 4.2%. The increase was attributed to the health insurance tax, which was reinstated in 2018.

2. The number of insured citizens decreased by 0.2%.

(Source: Centers for Medicare and Medicaid Services)

The latest health care spending statistics show that the number of citizens with health insurance is declining. In 2018, 90.6% of the population was insured. Compared to 2017, the percentage is lower, as the previous year 90.8% of the population had insurance. Or, in the span of one year, the number of uninsured citizens increased by 1 million. Currently, there are 30.7 million US citizens with no health insurance.

3. The share of GDP spent on health care equaled 17.7% in 2018.

(Source: Centers for Medicare and Medicaid Services)

The current gross domestic product (GDP) is estimated to be close to $22 trillion. In 2017, health care costs represented 17.9% of the GDP. In 2018, the percentage decreased slightly, by 0.2%. So, the current percentage of GDP spent on health care is 17.7%.

4. Hospital care spending reached $1.2 trillion.

(Source: Centers for Medicare and Medicaid Services)

health care spending statistics

Hospital care spending increased by 4.7% in 2017 and by 4.5% in 2018. The total amount spent on hospital care services in 2018 equals $1.2 trillion. If we are looking at cost statistics regarding the type of product or service, hospital care spending represents 33% of health care costs. It is 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.

5. Physician services increased by 4.1% in 2018.

(Source: Centers for Medicare and Medicaid Services)

If we do a breakdown of healthcare costs by type of service and product, then with $725.6 billion spent in 2018, physician and clinical services represent the second-largest share of costs in this category. This is a smaller increase in spending, compared to the 2017 growth of 4.7%.

6. Spending on prescription drugs reached $335 billion in 2018.

(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 2017, spending on prescription drugs increased by 1.4%. Later, in 2018 spending increased by 2.5%.

7. In 2018, $191.6 billion were spent on health, residential, and personal care services.

(Source: Centers for Medicare and Medicaid Services)

Those $191.6 billion cover 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 4.6% in 2018, following a 5.5% increase in 2017.

8. Nursing care facilities expenses grew by 1.4%.

(Source: Centers for Medicare and Medicaid Services)

In 2018, $168.5 billion were spent on nursing care facilities and continuing care retirement facilities. This marks a 1.4% growth. Not that impressive, compared to the increase of 2% in 2017.

9. Annual healthcare costs of dental services increased by 4.6%.

(Source: Centers for Medicare and Medicaid Services)

In 2018, dental care spending grew by 4.6%. The previous year the spending increase was marked with 3.8%. The total amount spent equaled $135.6 billion. The largest share of the costs, or 46% to be exact, are attributed to private health insurance. Out of pocket spending represents 40% of the costs. It includes deductibles and any other costs not covered by insurance.

10. There was a home health care cost increase of 5.2% in 2018.

(Source: Centers for Medicare and Medicaid Services)

Home health care addresses only the care provided to patients by medical professionals in their home. The total expenses in 2018 were $102.2 billion. In 2017, home care spending had increased by 4.5%. In 2018 this type of spending increased by 5.2%.

11. 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 2018 equaled $103.9 billion, reaching 6.5%. The previous year, in 2017, there was an increase of 5.2%.

12. Private health insurance spending reached $1.2 trillion in 2018.

(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 increased by 5.8% in 2018, following a not so insignificant increase of 4.9% in 2017. 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.

13. Spending on Medicare reached $750.2 billion in 2018.

(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% of spending by sources of funds. In 2018, there was an increase of 6.4%. Back in 2017, there was an increase in spending by 4.2%.

(Source: Centers for Medicare and Medicaid Services)

health care spending statistics

Medicaid expenditures increased by 3%, reaching $597.4 billion. The previous year there was a similar increase of 2.6%. Likewise, this is attributed to the higher net cost of insurance.

15. Out of pocket spending reached $375.6 billion in 2018.

(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 2.8% in 2018. The year before, there was a 2.2% in out of pocket spending.

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.

16. Health care costs per person in the United States are 28% higher than in Switzerland.

(Source: Health System Tracker)

Compared to other OECD countries, the USA has the highest healthcare-related expenses. According to 2017 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. 28% less, to be exact.

17. OECD countries on average have 50% lower health care expenditures than the USA.

(Source: Health System Tracker)

According to OECDчя 2017 health care statistics, the average yearly amount citizens spend on health care is $5,280. It was estimated that in 2017, the average amount US citizens spent on health care was $10,224.

18. 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, after the health care cost increases since 1980, the average growth rate of the USA is 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 2017, 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.

Health consumption expenditures per capita:

  • USA – $10,224
  • Switzerland – $8,009
  • Germany – $5,728
  • Sweden – $5,511
  • Austria – $5,440
  • Netherlands – $5,386

19. The annual growth rate of expenses is 1.1% 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 USA 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, 2017 health care spending statistics show that once again the USA has the highest annual growth rate when it comes to health care – 3.6% compared to the average of 2.5%.

20. Private health care spending in the USA is 3 times higher than the average.

(Source: Health System Tracker)

Public health care spending in the US similar to that of other OECD countries. In 2016, public expenditures on health care represented 8.5% of the GDP. In Switzerland, the percentage was 7.9%. In Germany, public spending on health care represented 9.5% 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.

21. 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 will 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%.

22. 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.

23. 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.

24. 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. Though 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 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.

The government should take action to make medical care accessible for everyone. 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 that where the percentage of GDP spent on medical costs is almost 20% or $3.6 trillion. A simply unacceptable fact.

Sources:

  1. Centers for Medicare and Medicaid Services
  2. Centers for Medicare and Medicaid Services
  3. Centers for Medicare and Medicaid Services
  4. Centers for Medicare and Medicaid Services
  5. Centers for Medicare and Medicaid Services
  6. Centers for Medicare and Medicaid Services
  7. Centers for Medicare and Medicaid Services
  8. Centers for Medicare and Medicaid Services
  9. Centers for Medicare and Medicaid Services
  10. Centers for Medicare and Medicaid Services
  11. Centers for Medicare and Medicaid Services
  12. Centers for Medicare and Medicaid Services
  13. Centers for Medicare and Medicaid Services
  14. Centers for Medicare and Medicaid Services
  15. Centers for Medicare and Medicaid Services
  16. Health System Tracker
  17. Health System Tracker
  18. Health System Tracker
  19. Health System Tracker
  20. Health System Tracker
  21. Centers for Medicare and Medicaid Services
  22. Centers for Medicare and Medicaid Services
  23. Centers for Medicare and Medicaid Services
  24. Centers for Medicare and Medicaid Services
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