National health spending forecasts through 2021

Office of the Actuary staff at the Centers for Medicare and Medicaid Services have released their annual projections on national health expenditures through 2021. Here are some highlights:

• The nation’s spending on health care will grow from nearly $2.5 trillion in 2009 to $4.8 trillion in 2021. Over $776 billion [31.1%] went for hospital care in 2009, and by 2021, the hospital portion will grow to $1.5 trillion [31.3%].
• Health expenditures accounted for 17.9% of the nation’s GDP, and are forecast to rise to 19.6% of GDP by 2021.
• National health spending per person was $8,149 in 2009 and will rise to $14,203 by 2021.
• For 2011-13, national health spending is expected to grow at an annual rate of 4%, up slightly from the historically low 3.8% rate of 2009. In 2021 the annual growth rate is projected to be 6.2%.
• Use of health services remained low in 2011, according  to preliminary data, and is expected to remain low through 2013.
• Health spending will accelerate by 7.4% in 2014 based on major coverage expansions from the Affordable Care Act.
• Government – federal, state, and local – spending  on health care will grow from 46% of all national health expenditures in 2011 to almost 50% in 2021.

The spending projections also break-out data for physicians, dentists, and other professional services; home health care; nursing care facilities and continuing care retirement communities; retail sale of prescription drugs, durable medical equipment, and other non-durable medical products; government administration; net cost of health insurance; government public health activities, investment in research and in structures and equipment; and other health, residential, and personal care.

Spending is further analyzed by funding source, including out-of-pocket; private health insurance; Medicare; Medicaid by federal and state government support levels; other health insurance programs; other third pay payers and programs; and investments.

Sources:

Keehan SP and others. National health expenditure projections: modest annual growth until coverage expands and economic growth accelerates. Health Affairs 31(7): 1-7, July 2012 [Online first, June 14, 2012]. http://content.healthaffairs.org/content/early/2012/06/11/hlthaff.2012.0404.abstract

National health expenditure projections 2011-2021. US Center for Medicare and Medicaid Services, accessed June 22, 2012 at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected.html

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org