Chat with us, powered by LiveChat National Health Care Spending in 2017 Growth Article Analysis | All Paper
+1(978)310-4246 credencewriters@gmail.com
  

Read the article attached and write a 300 to 500 word critique, reflection, insight, etc. Your analysis is expected to be well thought-out, with supporting rationale and documentation. DO NOT MERELY SUMMARIZE THE ARTICLE. I am looking for your thoughts and comments about the reading, what that was most important or relevant to you or your work and how it can be applied to your career in health care management. Include links/references to any resources that you used in researching your submission. Be prepared to discuss your analysis in class.DO NOT WRITE ABOUT ANYTHING FROM THE OUT SIDE NOR THE INTERNET
martin__et_al.__2019___1_.pdf

Unformatted Attachment Preview

Costs
10.1377/hlthaff.2018.05085
HEALTH AFFAIRS 38,
NO. 1 (2019): 96–106
©2019 Project HOPE—
The People-to-People Health
Foundation, Inc.
doi:
&
Spending
By Anne B. Martin, Micah Hartman, Benjamin Washington, Aaron Catlin, and The National Health
Expenditure Accounts Team
National Health Care Spending
In 2017: Growth Slows To
Post–Great Recession Rates;
Share Of GDP Stabilizes
Anne B. Martin (anne.martin
@cms.hhs.gov) is an
economist in the Office of the
Actuary, Centers for Medicare
and Medicaid Services (CMS),
in Baltimore, Maryland.
ABSTRACT Total nominal US health care spending increased 3.9 percent
to $3.5 trillion in 2017, slowing from growth of 4.8 percent in 2016. The
rate of growth in 2017 was similar to the increases between 2008 and
2013, which preceded the faster growth experienced during 2014–15—a
period that was marked by insurance coverage expansion and large
increases in prescription drug spending. Slower growth in health care
spending in 2017 was mainly attributable to the use and intensity of
goods and services, particularly for hospital care, physician and clinical
services, and retail prescription drugs. Nearly all major sources of
insurance and sponsors of health care experienced slower growth in
2017. On a per capita basis, spending on health care increased 3.2 percent
and reached $10,739 in 2017. The share of gross domestic product
devoted to health care spending was 17.9 percent in 2017, similar to
the share in 2016.
Micah Hartman is a
statistician in the CMS Office
of the Actuary.
Benjamin Washington is an
economist in the CMS Office
of the Actuary.
Aaron Catlin is a deputy
director in the National Health
Statistics Group, CMS Office
of the Actuary.
The National Health
Expenditure Accounts
Team is recognized in the
acknowledgments at the end
of the article.
T
otal health care spending in the
United States reached $3.5 trillion
in 2017 and increased 3.9 percent, a
0.9-percentage-point slower rate of
growth than in 2016 (exhibit 1).1
However, economic growth, as measured by
gross domestic product (GDP), accelerated, increasing 4.2 percent in 2017 compared to just
2.7 percent a year earlier. Because of the convergence of these two growth rates, the health
spending share of GDP in 2017 (17.9 percent)
was similar to that in 2016 (18.0 percent).2
The slower growth in health care spending in
2017 resulted primarily from slower growth in
hospital care, physician and clinical services,
and retail prescription drugs, with residual use
and intensity of these goods and services contributing substantially to the trend. In 2017 there
was a slight uptick in medical price growth because of faster underlying overall inflation. From
a payer perspective in 2017, spending growth
was slower for private health insurance, Medic96
Health Affairs
J a n u a ry 2 0 1 9
aid, and out-of-pocket expenditures, while Medicare spending growth remained relatively flat.
The recent health spending trends follow elevated rates of growth in 2014 and 2015—years
when such growth averaged 5.5 percent and
outpaced GDP growth, which had an average
annual rate of 4.2 percent. As a result, the health
spending share of the economy increased from
17.2 percent in 2013 to 17.6 percent in 2015. The
higher rates of growth in health spending during
2014 and 2015 were affected not only by expanded insurance coverage for Medicaid and private
health insurance Marketplace plans (and the associated increases in the use of services for people who gained coverage) but also by spending
for retail prescription drugs, which grew rapidly
during these two years in large part because of
spending for drugs used to treat hepatitis C. In
2016 health spending growth slowed to 4.8 percent as the initial impacts of expanded enrollment subsided and as spending for hepatitis C
drugs declined.3 However, economic growth in
38:1
Downloaded from HealthAffairs.org on January 10, 2019.
Copyright Project HOPE—The People-to-People Health Foundation, Inc.
For personal use only. All rights reserved. Reuse permissions at HealthAffairs.org.
2016 was the lowest since the Great Recession, at
just 2.7 percent, and consequently the health
spending share of GDP increased by 0.4 percentage point to 18.0 percent.
The low rate of health spending growth in 2017
(3.9 percent) was similar to the average annual
growth during 2008–13 that predated the major
coverage expansions, when there was a net decline in private health insurance enrollment, a
low rate of growth in per enrollee benefit spending (for private health insurance, Medicare, and
Medicaid), and a slowdown in medical price inflation and in the residual use and intensity of
goods and services. Over this period, which included the end of the Great Recession, overall
economic growth was low (averaging 2.5 percent), and accordingly the health spending share
of GDP increased by 0.9 percentage point from
2008 (16.3 percent) to 2013 (17.2 percent).4
Factors Accounting For Growth
On a per capita basis, national health care expenditures increased 3.2 percent in 2017, compared to a faster per capita growth rate of 4.0 percent in 2016 (exhibit 1). The slower growth is
attributable to a deceleration in the residual use
and intensity of goods and services, which increased at a slower rate of 1.1 percent in 2017
compared to 2.1 percent in 2016 (exhibit 2).5
However, medical price growth increased slightly, from 1.3 percent in 2016 to 1.6 percent in
2017. Changes in the age and sex composition
of the population accounted for the remaining
0.5 percentage point of total per capita health
spending growth in 2017 (a factor whose growth
remains relatively steady from year to year).
Slower growth in the use and intensity of
health care goods and services in 2017 may have
been affected by slower growth in overall health
insurance enrollment, as the insured share of
the population fell from 91.1 percent in 2016
to 90.9 percent in 2017 (exhibit 3). Growth in
use and intensity decelerated for most health
care goods and services, including for hospital
care, physician and clinical services, retail prescription drugs, nursing care facilities and continuing care retirement communities, other professional services, dental services, and other
nondurable medical products.
Medical price growth includes the effects of
both economywide inflation (as measured by
the GDP price index), which increased 1.9 percent in 2017 following growth of 1.1 percent in
2016 (exhibit 1), and medical-specific inflation
(beyond economywide inflation), which decreased 0.3 percent after growth of 0.2 percent
in 2016, continuing a trend of low or declining
growth that began in 2012. The decline in excess
medical price inflation was apparent across most
goods and services, in particular for hospitals,
physicians and clinics, and retail prescription drugs.
Sponsors Of Health Care
In 2017 the federal government and households
accounted for the largest shares of health care
spending (28 percent each), followed by private
businesses (20 percent), state and local governments (17 percent), and other private revenues
(7 percent) (exhibit 4).6 While each sponsor’s
share of total health care spending remained
steady between 2016 and 2017, growth in spending by private businesses, households, and the
federal government was slower than in 2016, and
spending by state and local governments and
other private revenues increased more rapidly
than in 2016.
Federal spending growth decelerated from
4.9 percent in 2016 to 3.2 percent in 2017, slowing for the third consecutive year after increasing
10.9 percent in 2014, which was mainly the result
of the Medicaid coverage expansion. Slower
growth in federal Medicaid spending was the
primary reason for slower growth in total federal
government spending for health care in 2017,
driven by a deceleration in Medicaid enrollment
growth, a reduction in the federal government’s
share of funding for newly eligible enrollees
(from 100 percent financing in 2014–16 to
95 percent in 2017), and a decline in the net cost
of insurance for Medicare and Medicaid enrollees in private plans.7 Federal Medicaid payments
accounted for 37 percent of total federal government spending on health in 2017: These payments increased just 0.8 percent in 2017 following 4.6 percent growth in 2016 and double-digit
growth in both 2014 and 2015 (exhibit 1).
Growth in state and local governments’ health
spending accelerated slightly from 3.8 percent in
2016 to 4.1 percent in 2017 (exhibit 4), a consequence of faster growth in state and local Medicaid spending (which accounted for 37 percent
of health spending by state and local governments). State and local Medicaid spending increased 6.4 percent in 2017 following a growth
rate of 3.6 percent in 2016 (exhibit 1). This faster
growth resulted mainly from an increase in the
states’ share of funding for the newly eligible
Medicaid population (to 5 percent in 2017), as
the initial years of the expansion had been fully
funded by the federal government.
The share of health care financed by private
businesses remained stable in 2010–17, representing about 20 percent of total health care
spending. Growth in this spending slowed to a
rate of 4.1 percent in 2017, compared to 5.5 perJanuary 2019
Downloaded from HealthAffairs.org on January 10, 2019.
Copyright Project HOPE—The People-to-People Health Foundation, Inc.
For personal use only. All rights reserved. Reuse permissions at HealthAffairs.org.
38:1
Health A ffairs
97
Costs
&
Spending
Exhibit 1
National health expenditures (NHE), aggregate and per capita amounts, share of gross domestic product (GDP), and annual growth, by source of funds,
calendar years 2011–17
2011a
Source of funds
2012
2013
2014
2015
2016
2017
Expenditure amount
NHE, billions
Health consumption expenditures
Out of pocket
Health insurance
Private health insurance
Medicare
Medicaid
Federal
State and local
Other health insurance programsb
Other third-party payers and programs
and public health activity
Investment
Population (millions)c
GDP, billions of dollars
NHE per capita
GDP per capita
Prices (2012 ¼ 100:0)
Chain-weighted NHE deflator
GDP price index
Real spending
NHE, billions of chained dollars
GDP, billions of chained dollars
NHE as percent of GDP
Annual growth
$2,690.6
2,541.3
310.0
1,950.4
898.5
544.8
407.0
247.3
159.7
100.1
$2,798.0
2,644.9
318.8
2,023.4
929.6
568.5
422.9
243.4
179.5
102.4
$2,881.8
2,728.6
325.9
2,088.1
947.1
589.9
445.2
256.9
188.4
105.9
$3,030.9
2,881.1
330.9
2,229.7
1,000.7
618.6
497.8
305.7
192.1
112.7
$3,205.9
3,051.5
340.9
2,382.4
1,069.8
649.0
542.6
342.6
200.1
121.0
$3,361.1
3,202.9
356.1
2,504.5
1,136.4
677.1
565.6
358.3
207.3
125.3
$3,492.1
3,324.5
365.5
2,604.2
1,183.9
705.9
581.9
361.2
220.6
132.6
280.9
149.4
311.1
$15,542.6
$8,649
$49,961
302.7
153.2
313.4
$16,197.0
$8,927
$51,676
314.7
153.2
315.7
$16,784.9
$9,129
$53,171
320.4
149.9
318.1
$17,521.7
$9,529
$55,084
328.2
154.4
320.4
$18,219.3
$10,006
$56,862
342.4
158.2
322.9
$18,707.2
$10,410
$57,941
354.8
167.6
325.2
$19,485.4
$10,739
$59,923
98.4
98.1
100.0
100.0
101.3
101.8
103.1
103.7
104.0
104.8
105.4
105.9
107.1
107.9
$2,735
$15,841
17.3
$2,798
$16,197
17.3
$2,845
$16,495
17.2
$2,941
$16,900
17.3
$3,082
$17,387
17.6
$3,189
$17,659
18.0
$3,262
$18,051
17.9
NHE
Health consumption expenditures
Out of pocket
Health insurance
Private health insurance
Medicare
Medicaid
Federal
State and local
Other health insurance programsb
Other third-party payers and programs
and public health activity
Investment
Populationc
GDP, billions of dollars
NHE per capita
GDP per capita
Prices (2012 ¼ 100:0)
Chain-weighted NHE deflator
GDP price index
Real spending
NHE, billions of chained dollars
GDP, billions of chained dollars
3.5%
3.5
3.4
3.9
4.0
4.8
2.4
−7.2
22.0
4.8
4.0%
4.1
2.8
3.7
3.5
4.3
3.9
−1.6
12.4
2.2
3.0%
3.2
2.2
3.2
1.9
3.8
5.3
5.5
4.9
3.4
5.2%
5.6
1.5
6.8
5.7
4.9
11.8
19.0
2.0
6.4
0.6
4.7
0.7
3.7
2.8
3.0
7.8
2.5
0.8
4.2
3.2
3.4
4.0
0.0
0.7
3.6
2.3
2.9
1.8
−2.2
0.8
4.4
4.4
3.6
2.4
2.1
1.7
1.9
1.3
1.8
1.2
1.6
2.3
2.2
1.7
1.8
5.8%
5.9
3.0
6.8
6.9
4.9
9.0
12.1
4.2
7.4
4.8%
5.0
4.4
5.1
6.2
4.3
4.2
4.6
3.6
3.5
3.9%
3.8
2.6
4.0
4.2
4.2
2.9
0.8
6.4
5.8
2.4
3.0
0.7
4.0
5.0
3.2
4.3
2.4
0.8
2.7
4.0
1.9
3.6
6.0
0.7
4.2
3.2
3.4
1.7
1.9
0.9
1.0
1.3
1.1
1.6
1.9
3.4
2.5
4.8
2.9
3.5
1.6
2.3
2.2
SOURCES Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group; and US Department of Commerce, Bureau of Economic
Analysis and US Census Bureau. NOTES Definitions, sources, and methods for NHE categories can be found in Centers for Medicare and Medicaid Services. National Health
Accounts methodology paper, 2017: definitions, sources, and methods [Internet]. Baltimore (MD): CMS; 2018 [cited 2018 Dec 5]. Available from: http://www
.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/dsm-17.pdf. Numbers may not add to totals
because of rounding. Percentage changes are calculated from unrounded data. aAnnual growth, 2010–11. bIncludes health-related spending for Children’s Health
Insurance Program (CHIP) Titles XIX and XXI; Department of Defense; and Department of Veterans Affairs. cEstimates reflect the Census Bureau’s definition of
resident-based population, which includes all people who usually reside in the fifty states or the District of Columbia but excludes residents living in Puerto Rico
and areas under US sovereignty, members of the US Armed Forces overseas, and US citizens whose usual place of residence is outside of the US. Estimates also
include a small (typically less than 0.2 percent of the population) adjustment to reflect census undercounts.
98
H ea lt h A f fai r s
January 2019
38:1
Downloaded from HealthAffairs.org on January 10, 2019.
Copyright Project HOPE—The People-to-People Health Foundation, Inc.
For personal use only. All rights reserved. Reuse permissions at HealthAffairs.org.
cent in 2016 (exhibit 4). Contributions by private
businesses to employer-sponsored private
health insurance premiums accounted for the
largest share of such businesses’ health spending
in 2017 (77 percent); growth for this category
decelerated from 6.5 percent in 2016 to 4.6 percent in 2017 (data not shown).
Household health care spending includes outof-pocket spending, contributions to private
health insurance premiums, and contributions
to Medicare through payroll taxes and premium
payments. Household spending constituted
28 percent of total health spending in 2017,
a share that was unchanged since 2014. In
2017 health spending by households increased
3.8 percent, which was a slower rate of growth
than that of 4.8 percent in 2016. This deceleration was mainly a result of slower growth in outof-pocket spending (the largest category of
household spending, at 37 percent), which increased 2.6 percent in 2017 compared to growth
of 4.4 percent in 2016 (exhibit 1). Out-of-pocket
spending includes all copayments, deductibles,
and all other direct payments made by individuals for medical goods and services. Slower
growth in out-of-pocket spending was driven
for the most part by slower growth in spending
for nursing home and continuing care retirement communities, physician and clinical services, and dental services.
Hospital Care
Hospital care spending increased 4.6 percent in
2017 to reach $1.1 trillion, or 33 percent of total
health care spending (exhibit 5). Growth in 2017
was slower than in 2016, when this spending
increased 5.6 percent, and the deceleration reflected slower growth in nonprice factors such as
the use and intensity of goods and services, as
growth in outpatient visits slowed while growth
in inpatient days increased at about the same
rate in both 2016 and 2017.8,9 Conversely, price
growth for hospital care services increased
slightly in 2017 to 1.7 percent, from 1.2 percent
in 2016.10
Private health insurance expenditures continued to account for the largest share of spending
for hospital care (40 percent) in 2017 and increased 5.0 percent, which was a slower growth
rate than that of 8.3 percent in 2016 and the
recent peak of 9.3 percent in 2015 (data not
shown). The slower growth in 2017 was more in
line with the average annual rate of growth experienced during 2008–13 (5.7 percent), which
occurred before the impacts of the enrollment
increases that were prevalent during 2014 and
2015 (when growth averaged 7.1 percent).
Medicare spending for hospital care (25 per-
Exhibit 2
Factors accounting for growth in per capita national health expenditures (NHE), selected
periods, calendar years 2004–17
SOURCE Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group. NOTES Medical price growth, which includes economywide and excess medical-specific
price growth (or changes in medical-specific prices in excess of economywide inflation), is calculated
using the chain-weighted NHE price deflator. “Residual use and intensity” is calculated by removing
the effects of population, age and sex factors, and price growth from the nominal expenditure level.
cent share) increased 3.8 percent in 2017, a
slower growth rate than that of 4.6 percent in
2016, largely because of a decline in spending for
inpatient services in the traditional fee-forservice program (data not shown). This decrease
resulted in part from slower growth in the average complexity of admissions, as well as other
factors—including the continuation of legislated
adjustments to payment updates, reductions in
payments for disproportionate share hospitals,
and increased enrollment in Medicare private
health plans (whose enrollees tend to use more
physician and less hospital services, compared to
enrollees in fee-for-service plans).11
Medicaid spending for hospital care (17 percent share) increased 2.4 percent in 2017, which
was slower than the growth rate of 3.0 percent in
2016, as enrollment growth slowed and supplemental inpatient and outpatient hospital payments declined at a faster rate in 2017 than in
2016 (data not shown).12
Physician And Clinical Services
Spending for physician and clinical services grew
4.2 percent in 2017, reaching $694.3 billion, or
20 percent of total health care spending (exhibit 5). This increase followed faster growth of
5.6 percent in 2016 and 6.0 percent in 2015 (the
most recent peak). Although spending growth
J a n u a ry 2 0 1 9
Downloaded from HealthAffairs.org on January 10, 2019.
Copyright Project HOPE—The People-to-People Health Foundation, Inc.
For personal use only. All rights reserved. Reuse permissions at HealthAffairs.org.
38:1
H e a lt h A f fai r s
99
Costs
&
Spending
Exhibit 3
National health expenditures (NHE) and health insurance enrollment, aggregate and per enrollee amounts, and annual
growth, by source of funds, calendar years 2011–17
2011a
2012
2013
2014
2015
2016
2017
Expenditure (billions)
Expenditure growth
Per enrollee expenditure
Per enrollee expenditure growth
Enrollment (millions)
Enrollment growth
Medicare
$898.5
4.0%
$4,857
4.4%
185.0
−0.4%
$929.6
3.5%
$4,951
1.9%
187.8
1.5%
$947.1
1.9%
$5,052
2.0%
187.5
−0.2%
$1,000.7
5.7%
$5,195
2.8%
192.6
2.8%
$1,069.8
6.9%
$5,454
5.0%
196.1
1.8%
$1,136.4
6.2%
$5,771
5.8%
196.9
0.4%
$1,183.9
4.2%
$6,001
4.0%
197.3
0.2%
Expenditure (billions)
Expenditure growth
Per enrollee expenditure
Per enrollee expenditure growth
Enrollment (millions)
Enrollment growth
$544.8
4.8%
$11,411
2.3%
47.7
2.5%
$568.5
4.3%
$11,441
0.3%
49.7
4.1%
$589.9
3.8%
$11,503
0.5%
51.3
3.2%
$618.6
4.9%
$11,705
1.7%
52.8
3.1%
$649.0
4.9%
$11,954
2.1%
54.3
2.7%
$677.1
4.3%
$12,144
1.6%
55.8
2.7%
$705.9
4.2%
$12,347
1.7%
57.2
2.5%
Medicaid
Expenditure (billions)
Expenditure growth
Per enrollee expenditure
Per enrollee expenditure growth
Enrollment (millions)
Enrollment growth
$407.0
2.4%
$7,271
−1.2%
56.0
3.7%

Purchase answer to see full
attachment