The global health spending trends confirm that the world’s fund of health services is transforming. The total healthcare spending is growing at a faster pace than gross domestic products. And public health spending is fundamental to universal health coverage. However, in the last decade, the government hasn’t paid any critical attention to these services.
So, here is a healthcare spending breakdown for the public so that you can analyze the trends and cover your health expenses over the long run.
Health Spending by the U.S.
The essential part of healthcare spending break down is an analysis of government investment in the industry and what has changed over the years. In the year 2017, the United States of America spent $3.492.1 billion on healthcare services. But do you know where did it go?
The spending is broken down in the following health categories:
- Hospital Care
- Physician Services
- Clinical Services
- Prescription Drugs
- Nursing Care Facilities
- Home Health Care
- Other Health Care Costs
- Government public health activities
- Government Administration that includes the cost of insuring individuals via health insurance programs
- Net Cost of Health Insurance and the difference between the expenses and benefits incurred
- Investment Spending
There is even a new AMA Policy Research Perspectivethat can provide you a detailed insight on the spending done by the U.S. Government on healthcare systems and services in 2017.
Projections for 2018-2027 Health Expenditure
Under thehealthcare spending breakdown, we must understand how these categories of healthcare services are expected to grow in the upcoming years. But before that, let’s take a look at the significant projectionsfor the 2018-2027 periods.
- National health spending may grow up to $6 trillion by 2027. This projects the average growth rate of 5.5% per year.
- Throughout 2018-2027, health spending should grow .8% faster than the GDP per year. As a result, the health care share of GDP will increase from 17.9% in 2017 to 19.4% as we reach 2027.
- The prices for healthcare goods and services are projected to grow faster in the upcoming years.
- In the upcoming years, Medicare growth will exceed the Medicaid sector and the private health insurance sector.
Looking over the numbers, we expect the healthcare industry to grow; the government can create a specific plan to follow. This will help to evolve the current trends and scale the growth of the services.
Key Trends in Healthcare Spending by Sector That Will Transform
Whether it is the hospital care services, clinical services, physician services, or prescription drugs, the healthcare spending breakdownhas been an irregular curve. The trends have shifted in the last decade of 2008 to 2017. And in the next decade, the AMA is trying further to reduce the healthcare cost growth rate while maintaining the services.
If it is possible to reduce the administrative burdens, the practice costs can also be reduced. Working to reform and improve the manual and burdening processes will increase the efficiency in physician practices. Furthermore, it will lower the administrative costs of healthcare spending.
- Prescription Drugs
With only 0.4% growth in 2017, prescription drug spending is a prominent part of healthcare costs breakdown. As the new drugs are introduced, the utilization growth is also accelerated. As the employers in the medical and healthcare industry are encouraging patients with chronic conditions to use these prescription drugs, the growth seems consistent over the next few years.
Hospital spending growth is projected to increase by 5.7% per year, on average,from 2017 to 2027. Due to the growth in Medicare spending and Medicaid spending, the patients get more streamlined healthcare services at affordable rates.
- Physician & Clinical Services
The physician and clinical services expenses are projected to grow by up to 5.4% per year. As a result, Medicare spending on these services will also experience rapid growth. Right now, people are shifting from private health insurance plans to Medicare facilities. It is happening because a majority of the population is heading to old age. Hence, the government needs to meet the demand of the aging population and anticipate the rising wage growth as well. This shift will impact the overall trend of physician and clinical services to a great extent.
Spending Categorized by Funds:
Now that we know the trends that will be affected in this decade, here is a healthcare costs breakdown for the mainstream industries. The spending is divided into:
- Private Health Insurance
A private Health Insurance agencywill benefit from the 34% share of the overall investment in the healthcare industry by the government.
As of 2017, the spending grew 4.2% and became $705.9 billion, and the growth has been consistent over the past couple of years.Hence, the Medicare industry will get a share of 20%.
As the enrollment growth was slow, and the Medicaid net cost of health insurance also got reduced, the spending on Medicaid was increased by 2.9%. A total of $581.9 billion is received by Medicaid, which is almost 17% of the total expenses for 2018-2027.
The rest of the spending goes to out-of-pocket with a share of 10%. It includes the costs of other major and minor healthcare services.
As there are various categories of healthcare services, it becomes essential that all sectors get a significant amount of spending for the upcoming years. Whether it is hospital care, retail prescription drugs, nursing care facilities, dental services, or home health care, all sectors of the healthcare industry are expected to grow.
Although the annual change in per capita spending might not increase like it was during the 1990s and 2000s, however, the government expects a slight improvement. Even a simple 1% growth can make a huge difference in the annual healthcare costs breakdown. The authorities have already lowered their expectations with the healthcare industry growth.
So, to prepare yourself for health emergencies, consult the experts like Porzio Aggregate SpendIDand get to know how the industry is expected to evolve in the future.