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Health spending is growing more slowly

It may not feel this way, but spending on health care actually grew more slowly last year.National he...

Posted: Dec 7, 2018 1:25 PM
Updated: Dec 7, 2018 1:25 PM

It may not feel this way, but spending on health care actually grew more slowly last year.

National health care spending increased 3.9% to $3.5 trillion in 2017, mainly because of more muted growth in the use of hospital care, physician services and medications, according to a report Thursday from the Centers for Medicare & Medicaid Services.

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Spending on retail prescription drugs rose only 0.4% last year, the smallest increase since 2012. A decline in the number of pain medications, including opioids, dispensed contributed to the slowdown, as did the continued shift to lower-cost generic drugs and a reduction in the growth rate of pricier pharmaceuticals, particularly those used to treat Hepatitis C.

The rising cost of health care is being closely watched by President Donald Trump and by lawmakers on both sides of the aisle.

Both parties have promised to rein in increases in health care spending, particularly the price of medications dispensed at pharmacies and those administered by doctors, which are usually much more expensive. The health care spending report, which was published in the Health Affairs journal, does not include data on doctor-administered medication.

Health care spending accounted for 17.9% of the economy last year, compared to 18% the year before, according to the report. It amounts to more than $10,700 per person.

The slowdown comes after several years of accelerated growth following the opening of the Affordable Care Act exchanges and the implementation of Medicaid expansion in 2014, which sent the newly insured flocking to health providers. Also contributing to the higher rates were the introductions of new, innovative medicines and faster growth in prices for existing brand-name drugs.

These trends pushed up the rate that year and in 2015, when it hit 5.8%, before starting to drift down in 2016 to 4.8%. The rate last year was similar to the average annual growth rate between 2008 and 2013, when the Great Recession and its aftermath helped depress yearly increases.

The federal government enjoyed a more modest uptick in spending growth on health care in 2017 for the third consecutive year, thanks largely to a deceleration in Medicaid enrollment growth, a scheduled reduction in federal funding for Medicaid expansion enrollees and a decline in the cost of coverage for Medicare and Medicaid enrollees in private insurance plans.

State and local governments, on the other hand, saw their spending growth rate increase a bit because states had to shoulder more of the costs of Medicaid expansion enrollees. (Under the Affordable Care Act, the federal government paid the full cost of expansion for the first three years, but only 95% last year.)

Americans also saw a moderation in the growth of their health care spending to 3.8%, down from 4.8% in 2016.

This was largely due to more modest increases in out-of-pocket spending, including copayments, deductibles and other direct payments to providers. In particular, the rate of spending on nursing home and continuing care retirement communities, physician and clinical services and dental services slowed.

Indiana Coronavirus Cases

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Confirmed Cases: 77565

Reported Deaths: 3105
CountyConfirmedDeaths
Marion16304733
Lake7840283
Elkhart499287
Allen4103164
St. Joseph368183
Hamilton2941104
Vanderburgh208215
Hendricks1972109
Cass18099
Johnson1800119
Porter139139
Clark133350
Tippecanoe126312
Madison104866
LaPorte95730
Howard93865
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Floyd83750
Marshall80123
Monroe77732
Delaware76852
Vigo75213
Dubois71812
Noble70829
Boone70446
Hancock69439
Jackson6065
Warrick60030
Shelby57228
LaGrange56910
Grant53230
Dearborn52228
Morgan49235
Henry46020
Clinton4564
Wayne40210
White38011
Montgomery36321
Lawrence35827
Harrison35524
Decatur34732
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Miami2792
Scott27810
Jasper2592
Greene25634
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Starke1817
Orange17924
Wabash1795
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Fulton1742
Jefferson1722
Knox1681
Whitley1606
Tipton15416
Sullivan1521
Washington1481
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Huntington1303
Newton12110
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Brown752
Blackford662
Pike660
Ohio656
Benton630
Vermillion610
Parke591
Switzerland560
Martin500
Crawford480
Union410
Warren251
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Ohio Coronavirus Cases

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Confirmed Cases: 105426

Reported Deaths: 3755
CountyConfirmedDeaths
Franklin19124533
Cuyahoga13999519
Hamilton9917260
Lucas5544324
Montgomery4544101
Summit3712224
Butler307064
Marion295245
Mahoning2644258
Pickaway240442
Stark1931142
Warren187739
Lorain186777
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Trumbull1578111
Fairfield144933
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Licking136751
Clark121815
Lake115443
Wood110158
Clermont98111
Medina97736
Miami88139
Allen81746
Tuscarawas80114
Portage78063
Greene74212
Mercer66813
Belmont62826
Richland62612
Erie61928
Ashtabula58046
Madison58010
Wayne56759
Geauga56545
Ross5204
Darke42529
Huron4135
Hancock4103
Sandusky40717
Ottawa40527
Athens3642
Holmes3316
Lawrence3230
Auglaize2866
Union2771
Scioto2601
Muskingum2561
Seneca2424
Jefferson2403
Preble2192
Shelby2194
Knox2189
Putnam21517
Washington21222
Coshocton1999
Champaign1922
Morrow1852
Hardin18012
Crawford1775
Clinton1746
Highland1692
Logan1692
Perry1643
Fulton1581
Ashland1563
Defiance1554
Wyandot1559
Brown1502
Williams1393
Fayette1260
Henry1242
Hocking1229
Guernsey1217
Carroll1145
Monroe9418
Pike800
Gallia781
Jackson780
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Noble190
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