Health care spending in the United States continues to grow, increasing 4.6% to $3.8 trillion in 2019 with growth across all categories, according to a new analysis from the Center for Medicare & Medicaid Services (CMS). What was behind it?
In 2019, hospital care and physician and clinical services (like visits to the doctor’s office) were the largest categories of spending – at $1.2 trillion and $772 billion respectively, growing 6.2% and 4.7% since 2018.
Compare those numbers to retail prescription drug spending—which totaled $369.7 billion in 2019, or just under 10% of overall health spending.
While prescription drug spending grew 5.7%, a lot of the growth is due to more prescriptions being dispensed: “Faster growth in utilization contributed to the acceleration in total retail prescription drug spending growth. The number of retail prescriptions dispensed (based on a 30-day supply) grew for the second consecutive year, increasing 3.2% after a growth rate of 2.7% in 2018,” explains Health Affairs.
Meanwhile, prescription drug prices actually continue to decline, by 1% in 2018 and .4% in 2019, “as price growth slowed for brand-name drugs and declined for generic drugs.”
Why it matters: The conversation about health care costs in the United States tends to focus on drug prices—but it’s clear other factors play a larger role in driving up patients’ out-of-pocket costs. If policymakers are serious about reducing out-of-pocket costs, we need systemic and bipartisan reforms that address legitimate concerns about U.S. health insurance and delivery, including the affordability and accessibility of medicines.
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