U.S. healthcare spending rose slightly in 2018

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Total healthcare spending in the U.S. increased 4.6% to reach $3.649 trillion in 2018, which is a slightly higher growth rate than in 2017 and comparable to the rate in 2016, according to an article published on December 5 in Health Affairs.

The small spike in healthcare spending in 2018 showed faster growth in nonpersonal spending, specifically the net cost of health insurance. Price growth was faster for health insurance mostly due to the impact of the reinstated health insurance tax, which had been suspended in 2017, according to the researchers.

"Except for the slight uptick that was driven primarily by the one-time impact of the reinstated health insurance tax, growth in 2018 was relatively stable," wrote the authors, led by Micah Hartman, a statistician in the Office of the Actuary, Centers for Medicare and Medicaid Services in Baltimore.

Healthcare spending increased 4.6% in 2018 compared with 4.2% in 2017. The growth was lower than that of the overall economy, which increased by 5.4% in 2018. The growth and the share of the economy devoted to healthcare as measured by gross domestic product decreased from 17.9% in 2017 to 17.7% in 2018, according to the researchers.

They found that the relative stability in spending growth since the insurance expansions in 2014 and 2015 reflected continued low growth in medical prices. These numbers are influenced by low economy-wide price growth, negative excess medical price inflation, and relative stability in health insurance enrollment, the authors wrote.

Despite the stability, they noted changes may be on the horizon due to the expansion of Medicaid coverage in five additional states and the repeal of the individual mandate penalty. Changes to the National Health Expenditure Accounts also will affect spending.

"The results of the upcoming comprehensive revision of the National Health Expenditure Accounts will be reflected in the release of next year's health spending report detailing trends through 2019," the authors wrote.

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