What is behind the recent slowdown in health
spending?
Peterson-Kaiser Health System Tracker
U.S. health care spending per capita has risen at
historically low rates in recent years
Average annual growth rate of health spending per capita for 1970’s – 1990’s;
Annual change in actual health spending 2000 – 2013 and projected (2014 – 2023)
14%
12%
10%
Change in Spending
Projected Change in Spending
12.0%
9.9%
8.6%
8%
7.4%
7.6%
6.2%
6.1%
6%
5.5%
5.8%
5.5% 5.3%
4.7% 4.7%
3.8%
4%
3.2% 3.4%
2.9% 3.1%
2.9%
3.7%
5.1%
5.5% 5.6% 5.3% 5.3%
5.2%
4.0%
2%
0%
1970's
1990's
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the
Actuary, National Health Statistics Group
Peterson-Kaiser Health System Tracker
Health spending growth has slowed in the U.S. and in
comparable countries
Average annual growth rate in total health expenditures per capita, U.S. dollars, PPP adjusted
Comparable country average
8%
United States
7.4%
7%
6.1%
6%
5.3%
5.3%
5.8%
5.1%
5%
4.0%
4%
2.9%
3%
2%
1%
0%
1990's
2000-2004
2004-2008
2008-2012
Source: Kaiser Family Foundation analysis of 2013 OECD data: "OECD Health Data: Health expenditure and financing: Health expenditure indicators",
OECD Health Statistics (database). doi: 10.1787/data-00349-en (Accessed on June 25, 2014). Notes: Data unavailable for: Australia and the Netherlands
in 2012; France from 1981 through 1984 and 1986 through 1989; and Germany in 1991. OECD reports a break in series for: Belgium in 2003; Canada in 1975
; France in 2003; and the Netherlands in 2005. Canada and Switzerland data are reported as estimated values for 2012.
Peterson-Kaiser Health System Tracker
Low growth rates have persisted for five years, sparking
researchers to look for the causes
Annual change in U.S. per capita health spending 2000 – 2013
10%
9%
8%
7%
6%
6.06%
5%
4%
3%
2.88%
2%
1%
0%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: Kaiser Family Foundation Analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the
Actuary, National Health Statistics Group
Peterson-Kaiser Health System Tracker
Exhibit 4
What types of structural changes in the health care
system may be contributing to the slowdown?
• Changes in insurance
– Higher deductibles and cost sharing
– Shifts from employer-sponsored coverage to lower-paying public coverage and in
uninsurance
• Changes in Medicare and Medicaid payment policies and limits on provider
reimbursements
• Slower diffusion of new medical technology, as examples:
– Few new high-cost prescription drugs, combined with existing brands moving to
generic status
– Slowing use of advanced imaging and expensive heart procedures
• Increased efficiency of health care providers
Peterson-Kaiser Health System Tracker
Medicare spending slowed for different reasons than
private spending
CBO projections of Mandatory outlays per Medicare beneficiary, predicted based on baseline year
$16,000
2010 baseline
2014 baseline
$14,913 per enrollee
(based on 2010
projections)
$15,000
$14,000
$13,000
$12,545 per enrollee
(based on 2014
projections)
$12,376
$12,000
$11,000
$11,328
$10,000
2014
2015
2016
2017
2018
2019
Source: Kaiser Family Foundation analysis of mandatory Medicare outlays and Medicare enrollment data from CBO Medicare baseline projections, 20102014: https://kaiserfamilyfoundation.files.wordpress.com/2014/07/medicare-spending-figure-1.png Notes: Grey lines represent 2011 – 2013 baseline
projections.
Peterson-Kaiser Health System Tracker
An annual percentage point difference in growth rates
makes a very large difference in spending over time
Projected annual change in U.S. per capita health spending 2014 – 2023, alternative scenarios
Projected NHE Per Capita
Projected Plus 1 Percentage Point
Projected Minus 1 Percentage Point
$18,000
$16,430
$16,000
$14,944
$13,580
$14,000
$12,000
$10,000
$8,000
$6,000
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the
Actuary, National Health Statistics Group
Peterson-Kaiser Health System Tracker