Growth of Healthcare Spending Slowed Last Year

The Trump administration reported a slowdown in national health spending in 2017 to $3.5 trillion, a 3.9 percent year-over-year gain versus 4.8 percent in 2016, according to the New York Times . Although healthcare spending comprised 17.9 percent of the U.S. economy last year, the growth rate for the major categories — medications, doctors, and hospitals — was slightly down compared to recent years. Health spending expanded at about the same rate as the general economy, reflecting a stabilization in healthcare's economic portion. "The relatively low rate of health spending growth in 2017 was similar to the average annual growth during 2008-13, which predated the major coverage expansions," noted Anne B. Martin with the U.S. Department of Health and Human Services. She and her colleagues suggested the slowdown may have been partly driven by a moderate decline in the number of Americans with health insurance last year. More insured people also have high-deductible health plans, which tend to make them cost-conscious. The administration also said federal healthcare spending jumped nearly 11 percent in 2014, mainly due to the expansion of Medicaid under the Affordable Care Act, but the growth has decelerated every year since then. Also considered factors were reductions if generic drug prices, lower price hikes for existing brand-name drugs, and fewer prescriptions for pain medications.