News: CMS estimates total healthcare spending rose 7.2% to $5.3 trillion in 2024
Total United States healthcare spending increased an estimated 7.2% to $5.3 trillion in 2024, according CMS actuaries’ annual estimate, similar to the 7.4% increase in 2023. The agency said this increase was largely driven by utilization and more complex services, not pricing increases, and that healthcare spending made up 18% of the broader economy, a slight increase from 17.7% in 2023. On average, the total translates to $15,574 spent on healthcare per person, Fierce Healthcare reported.
Study authors wrote that the sustained increase over the past two years, in comparison to the 4.9% average of the six years preceding the COVID-19 pandemic, is thanks largely to growth in personal healthcare spending. Broken down further, results showed:
- An 8.9% increase in hospital care spending ($1.6 trillion)
- An 8.1% increase in physician and clinical services spending ($1.1 trillion)
- A 7.9% rise in prescription drug spending ($467 billion)
The report also shows a 1.5% increase in hospital days and 3.2% rise in discharges. Micah Hartman, a statistician for the National Statistics Group at CMS and the study’s lead author, pointed to these statistics as evidence of a post-pandemic rebound in demand at a briefing with the press.
In 2024, annual healthcare expenditure also grew by 7.8% for Medicare, 6.6% for Medicaid, 8.8% for private health insurance, and 5.9% for out-of-pocket spending. Medicare spending grew 5.4%, private health insurance increased 5.2%, and Medicaid rose 16.6%.
Editor’s note: To read Fierce Healthcare’s coverage of this story, click here. To read the CMS fact sheet, click here.