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

The U.S. spent $3.8 trillion on health care last year, accounting for about 18% of the entire American economy, according to new federal data.

Why it matters: The U.S. has by far the most expensive health care system in the world, and every year it eats up a little more — from the federal government, states, employers and individuals.

By the numbers: Total national health expenditures rose by 4.6% in 2019, according to the Centers for Medicare & Medicaid Services.

  • That’s a modest increase by the standards of health care spending, although it outpaced inflation.
  • Hospitals remain the most expensive part of the system: The U.S. spent about $1.2 trillion on hospital care last year — nearly one-third of all health spending.
  • These figures include Medicare, Medicaid, private health insurance and out-of-pocket costs.

The intrigue: 2019 defied some historical norms about health care spending.

  • Typically, rising prices are the bigger driver of overall spending increases. Last year, however, prices took a backseat — increases in the use of medical services accounted for a bigger share of the rise in spending.
  • Similarly, private insurance usually sees much greater increases in per-person spending than government programs. But that, too, flipped on its head in 2019; Medicare’s per-person spending increased by 4%, compared to 3.2% for private insurance.

What’s next: These 2019 figures predate the coronavirus pandemic.

  • Early estimates suggest that the pandemic may have actually caused health care spending to fall this year — which makes sense, given that most elective procedures were completely shut down in the spring, but won’t last beyond the pandemic.

Go deeper

Updated Jan 15, 2021 - Axios Events

Watch: Affordability and the next administration

On Friday, January 15, Axios' Caitlin Owens hosted a conversation on the future of health care affordability with a new Biden administration, featuring former CMS administrator Dr. Mark McClellan and former Rep. Greg Walden (R-Ore.)

Dr. Mark McClellan discussed the priorities of the incoming Biden administration and challenges in health care access and affordability exacerbated by the pandemic.

  • On President-elect Biden dealing with the pandemic: "[He] was elected above all else for an effective response to the crisis. And that means the first round of legislation has to focus on more effective vaccination, more effective testing, reopening the economy, and giving people the economic support they need."
  • On people not getting the care they need during the pandemic: "We've seen a lot of health care complications because people did not get help. We don't have a strong public health system in this country...Most people did not get help. If they were at risk for infections, they had to go find a way to get tested on their own."

Rep. Greg Walden unpacked the value of telemedicine and creating an affordable, patient-centered health care system.

  • How technology can bridge existing health gaps: "We've learned the importance and practicality of getting health care closer to the patient. I'm speaking specifically about telemedicine. I think it can be both cost-effective and so much more convenient for the patient...You shouldn't have to rush into a hospital for everything you need."

Axios Vice President Yolanda Taylor Brignoni hosted a View from the Top segment with the CEO of OptumHealth, UnitedHealth Group, Dr. Wyatt W. Decker, who discussed the pandemic as a moment for the industry to think differently about how they provide accessible care.

  • On the potential for telemedicine: "Let's put the decision-making, good information, and support in the hands of a person and help provide them with digital tools that can give them easy access to health care with excellent outcomes. We [can] do this in a whole variety of ways by providing telehealth solutions."

Thank you UnitedHealth Group for sponsoring this event.

Former FDA commissioner: "Reliable drug supply is absolutely critical"

Axios' Caitlin Owens and former FDA commissioner Mark McClellan. Photo courtesy of Axios Events

Having a reliable supply of pharmaceutical drugs throughout America will be "absolutely critical" to boosting affordability in health care during the Biden administration, former Food and Drug Administration (FDA) commissioner Mark McClellan said at a virtual Axios Event on Friday.

The big picture: McClellan, who served under President George W. Bush, says drugs having limited supply and limited competition leads to elevated pricing. He considers drug supply to be a national security and public health issue.

Dan Primack, author of Pro Rata
45 mins ago - Economy & Business

Scoop: Red Sox strike out on deal to go public

Illustration: Sarah Grillo/Axios

The parent company of the Boston Red Sox and Liverpool F.C. has ended talks to sell a minority ownership stake to RedBall Acquisition, a SPAC formed by longtime baseball executive Billy Beane and investor Gerry Cardinale, Axios has learned from multiple sources. An alternative investment, structured more like private equity, remains possible.

Why it matters: Red Sox fans won't be able to buy stock in the team any time soon.