Growth in health spending slows

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The increase in out-of-pocket health spending was mostly due to Americans refusing to accept and partake in Obamacare and opting to have no insurance coverage at all or go with higher deductible plans.

While the rate of healthcare spending decrease previous year, the overall sending for health services continued to increase. Growth in non-price factors such as the use and intensity of services increased 3.8% and accounted for most of the increase in spending in 2016, though at a slower rate than the 4.5% increase in 2015.

The overall slowdown was highlighted by the National Health Expenditure report issued by the federal Centers for Medicare and Medicaid Services' Office of the Actuary.

During 2015, USA health care spending was 17.7% of gross domestic product. "In 2016, the slowdown in health care spending followed significant insurance coverage expansions under the ACA and very strong growth in retail prescription drug spending in 2014 and 2015". Another factor was faster growth in spending on retail prescription drugs during those years.

Private health insurance spending climbed 5.1 percent to $1.1 trillion previous year, Medicare spending increased 3.6 percent to $672.1 billion, and Medicaid spending rose 3.9 percent to $565.5 billion. Medicaid spending grew 11.5% in 2014 and 9.5% in 2015, due in part to the ACA. Medicare spending grew 3.6% to $671.2 billion in 2016, compared with 4.8% in 2015, while reporting stable enrollment growth. Medicare spending had increased by 4.8 percent in 2015 and 4.9 percent in 2014.

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"Over the last decade, the US has experienced unique events that have affected the health care sector, including the most severe economic recession since the Great Depression, major changes to the health care system because of the ACA and historic lows in medical price inflation", said Micah Hartman, a statistician in the Office of the Actuary and lead author of a Health Affairs article on the results.

Retail prescription drugs expenditures reached $328.6 billion and represented 10% of overall health spending.

But out-of-pocket spending, or spending directly by individuals instead of by their insurance plans or programs, grew at a faster rate than in recent years. Changes in the age and gender mix of the population accounted for 0.6 percentage point of the growth in per capita health spending. Slower growth was due in part to slower enrollment growth and was partly offset by faster growth in hospital prices, which accelerated slightly from 0.9% in 2015 to 1.2% a year ago.

According to the CMS, the main reason for the slow down was the decreasing demand for physician services, prescription drugs, and hospital care by the American public. CMS attributed the previous large increases to the introduction of new drugs and higher prices for existing drugs, particularly those used to help treat hepatitis C.

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