SCALE Healthcare Leadership Conference on October 18, 2023 at 8:00 AM-6:00 PM. Click here to register
Member Login
Home What is the anticipated growth for healthcare Spending in the Future?

What is the anticipated growth for healthcare Spending in the Future?

Health spending as a percent of Gross Domestic Product (GDP), 2015 - 2021; projected 2022 - 2031

By 2031, it is projected that health spending will continue to represent almost one-fifth of the U.S. economy.

  • Health spending is estimated to have grown more slowly than the economy in 2022 and is estimated to have returned to pre-pandemic levels (17.4% of GDP). However, health spending growth is expected to outpace growth in the overall economy starting in 2023 and eventually hit 19.6% of GDP by 2031.

Source: National Health Expenditure Data, CMS

Annual change in per capita health spending, 1970s – 2021; projected 2022 – 2031

Healthcare spending experienced a significant slowdown in 2021 but is anticipated to bounce back in the years to come.

  • Anticipated to average an annual rate of 4.8% from 2022 to 2031, this growth slightly surpasses the pre-pandemic rates, which averaged 3.9% from 2014 to 2019

Source: National Health Expenditure Data, CMS

CMS projections of national health expenditures, in US $ trillions

Projections for health spending in 2030 are currently 20% below what the CMS had anticipated a decade ago.

  • The variance in these projections can be attributed, in part, to a deceleration in the growth of health expenditure towards the end of the 2010s. It is also probable that the provisions established by the IRA, enabling Medicare to negotiate prices for specific highcost drugs and tethering drug price increments to the Consumer Price Index (CPI), have played a role in this divergence.
  • CMS actuaries’ estimates of total health expenditures from 2010 and 2015 projections extended out through 2031 indicate that health spending is now expected to be $1.9 trillion less than what CMS had expected in 2010 projections and $800 billion less than 2015 projections

Source: National Health Expenditure Data, CMS

Annual change in per capita prescription drug spending, 1970s - 2021; projected 2022 - 2031

Prescription drug spending witnessed a notable increase in growth in 2021 but is projected to decline to lower rates in the foreseeable future.

  • In 2022, slower Medicaid enrollment is expected to have slowed growth to 4.7% per capita. Growth in drug spending is projected to slow to 2.8% per capita in 2023, as Medicaid enrollment declines.

Source: National Health Expenditure Data, CMS

Out-of-pocket spending is expected to have grown by 3.8% per capita in 2022 and 4.4% per capita in 2023, but to drop to an average of 3.4% per capita for the following seven years.

Out-of-pocket spending per person rebounded in 2021 following a decline in 2020, but it is projected to stabilize in the future.

Source: National Health Expenditure Data, CMS

Annual change in per enrollee health spending, by payer, 2015-2021; projected 2022-2031

Per enrollee spending across all payers is anticipated to experience a short-term acceleration.

  • Growth in per enrollee Medicare spending is estimated to have slowed in 2022 to 3.1%, but is expected to rebound in 2023, partly driven by return in hospital use after a decrease in 2022.

Source: National Health Expenditure Data, CMS

Annual change in total spending on hospitals, physicians and clinics, and retail prescription drugs, 2015 – 2021;
projected 2022 – 2031

The growth in prescription drug spending is anticipated to decrease, falling below that of hospital and physician services.

  • In 2023, aggregate hospital spending is expected to increase by 9.3% due to a rebound in utilization and higher prices due to rising labor costs. Starting in 2025, hospital spending is expected to grow at average annual rate of 6.0% as hospitals transition away from pandemic-related use and spending.

Source: National Health Expenditure Data, CMS

Join as an Individual

Enhance the performance of your healthcare company with an Individual SCALE Membership.

JOIN US

Join as an Organization

Drive success across your organization and empower each member of your team with a SCALE Organizational Membership.

JOIN US

Elevating healthcare solutions through research and innovation on a global scale.

© 2024 EDUCATION by SCALE Healthcare.
All rights reserved. 
About
ASK AN EXPERT
Subscribe to our Newsletter
Facebook-f Twitter Instagram Linkedin Youtube

Log in

If you are a community member

OR

Thanks for visiting!

Put your email and we promise we won’t spam you. We have so much to show you.

Close

Join SCALE Community

We are excited for you to share in the benefits of SCALE community’s healthcare focus materials. If you are not currently a member sign up now to get unlimited access to all our materials.
Join Now
Log In
  • © 2023 All rights reserved.
Linkedin Twitter Instagram Facebook-square Youtube