Feb 21, 2019

America's health care economy keeps ballooning

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Data: Centers for Medicare & Medicaid Services and CIA World FactBook; Note: All values adjusted for inflation as of 2018; Chart: Harry Stevens/Axios

Americans spent $3.65 trillion on health care in 2018, according to new preliminary estimates from independent federal actuaries. That total is about the same size as Spain and Canada's entire economies — combined.

Why it matters: U.S. health spending last year was 4.4% higher than in 2017, a rate that is still growing faster than the broader economy — which means more money is being taken out of people's paychecks to pay for a system that continues to worry and frustrate patients.

By the numbers: That $3.65 trillion health care tab last year translates to $11,121 per person.

  • Spending on hospitals, doctors and other clinic services was $2.16 billion, holding steady at 59% of total health care spending.
  • The spending category that experienced the largest year-over-year increase was the general cost of administering health insurance, which rose 7.7% in 2018.
  • Spending on prescription drugs purchased in retail pharmacies went up 3.3% in 2018, higher than the 0.4% rate in 2017.
  • A majority of the bigger spending totals were due to higher overall prices, while the "use and intensity" of health care services played a smaller role.

Three main conduits pay for health care services: Medicare, Medicaid and private health insurance.

  • Private health insurance continues to fare the worst on controlling costs. Per-person spending among the privately insured rose 4.5% in 2018 despite the fact enrollment in private plans stayed flat.
  • Per-person spending in Medicaid and Medicare increased 1.1% and 3.1%, respectively, last year. Those government programs pay lower provider rates than private insurers.

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Japanese Prime Minister Shinzo Abe warned that the novel coronavirus pandemic could worsen if people fail to take the appropriate containment measures, at a Saturday news conference in Tokyo.

The big picture: The U.S. leads the world in confirmed coronavirus cases, as the number of global cases nears 620,000. Governments around the world are trying to curb the medical and financial fallout of COVID-19, as infections surge across Europe and the U.S.

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  1. Global: Total confirmed cases as of 11 a.m. ET: 618,043 — Total deaths: 28,823 — Total recoveries: 135,736.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 11 a.m. ET: 104,865 — Total deaths: 1,709 — Total recoveries: 894.
  3. Federal government latest: President Trump signed the $2 trillion coronavirus stimulus bill to provide businesses and U.S. workers economic relief.
  4. State updates: A group of Midwestern swing voters that supported President Trump's handling of the coronavirus less than two weeks ago is balking at his call for the U.S. to be "opened up" by Easter. Alaska is latest state to issue stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month.
  5. World updates: Italy reported 969 coronavirus deaths on Friday, the country's deadliest day. In Spain, over 1,300 people were confirmed dead between Thursday to Saturday.
  6. Business latest: President Trump authorized the use of the Defense Production Act to direct General Motors to build ventilators for those affected by COVID-19. White House trade adviser Peter Navarro has been appointed to enforce the act.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancing.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

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