Health Care Cost Increases Slow But Remain High

June 5, 2012

The latest National Health Expenditure Accounts data from the Centers for Medicare & Medicaid Services (CMS) shows that U.S. health care spending grew 3.9 percent in 2010 following record slow growth of 3.8 percent in 2009.  According to CMS, these are the two slowest growth rates in 50 years. Total health expenditures reached $2.6 trillion, $8,402 per person or 17.9 percent of the nation’s Gross Domestic Product (GDP).  Although a constant share of the economy, 17.9 percent of GDP remains the highest percentage on record.

The U.S. spends more on health care (whether measured in dollars, as a percentage of GDP or per capita) than any other developed country.  Our expenditures are nearly twice the Organization for Economic Cooperation and Development (OECD) average and 45 percent higher than the second most expensive health care system in the world, that of Holland. The OECD is composed of 34 relatively developed countries. Health care outcomes in the U.S. are not materially different than in other developed countries. To access the OECD database, click here.

The proportion of national health spending paid by private businesses has gradually decreased, from 24 percent in 1987 to 21 percent in 2010.  Private business’ health spending increased 0.9 percent in 2010, following a decline of 0.3 percent in 2009.

Employer contributions to private health insurance premiums accounted for the largest share of private business’ health spending in 2010 (77 percent), increasing from 74 percent in 2000.

To access CMS health care data, click here.