Dec 6, 2018 - Health

The steady rise of health care spending rolls on

Data: Centers for Medicare & Medicaid Services; Chart: Axios Visuals
Data: Centers for Medicare & Medicaid Services; Chart: Axios Visuals

The U.S. spent almost $3.5 trillion on hospitals, doctors, prescription drugs, medical devices and other health care services and items in 2017, according to new federal data.

The bottom line: That total was 3.9% higher than the country's health care tab from 2016 — lower than originally expected. But it still amounts to a pricey system with poor outcomes that has frustrated patients and eaten more of everyone's paychecks.

The big picture: The Centers for Medicare & Medicaid Services revised estimates from February and said the amount Americans spent on health care in 2017 now grew more slowly than the economy at large.

  • That's partially because fewer people went to the hospital, saw the doctor, ordered tests and bought drugs. But that decline in utilization was offset by rising prices.

By the numbers:

  • One-third of the country's spending came from private health insurance premiums that people had through their jobs or bought on their own. Another 10% came from out-of-pocket spending like copays and deductibles.
  • The amount spent in hospitals ($1.14 trillion) and doctors' offices ($920 billion) each increased above 4% annually, and together represented 59% of the country's health care spending.
  • Prescription drugs bought at a pharmacy or other retail locations were about 10% of total spending, barely more than 2016 thanks to people using more generics and fewer high-priced drugs. Total drug spending is closer to 15% when factoring in pharmaceuticals administered in hospitals or clinics.
Go deeper