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Healthcare spending surges in 2021

Total national health expenditures, US $ Trillions, 1970-2021

Total health expenditures increased moderately in 2021

Note: A constant dollar is an inflation adjusted value used to compare dollar values from one period to another. Total health expenditures represent the amount spent on health care and related activities (such as administration of insurance, health research, and public health), including expenditures from both public and private funds.

Source: KFF analysis of National Health Expenditure (NHE) data

Local and federal expenditures on public health, US $Billions, 1971-2021

Federal spending on public health decreased in 2021 from 2020 but remains above pre-pandemic levels

Total national health expenditures, US $ per capita, 1970-2021

On a per capita basis, real health spending decreased slightly in 2021

Note: A constant dollar is an inflation adjusted value used to compare dollar values from one period to another

Source: KFF analysis of National Health Expenditure (NHE) data

Total national health expenditures as percent of Gross Domestic Product, 1970-2021

Health spending accounts for nearly one-fifth of the U.S. economy

Source: KFF analysis of National Health Expenditure (NHE) data

Average annual growth rate of GDP per capita and total national health spending per capita, 1970-2021

Health spending growth slowed in recent decades but consistently exceeded GDP growth until 2021

From 1970 through 1980, the average annual per capita growth in the U.S. economy was 9.3% per year, compared to per capita health spending growth of 12.0%. Although health spending growth rate has since moderated, it generally continues to outpace growth of the economy. After a period of recession during the COVID-19 pandemic, the economy recovered in 2021 with GDP per capita increasing 10.6% over 2020. Per capita national health expenditures increased 2.6% from 2020-2021.

Note: 2020-2021 represents 1-year change

Source: KFF analysis of National Health Expenditure (NHE) data

Average annual expenditures growth rate select service types, 1970-2021

In the last decade, spending growth on hospitals has slowed

During the 1970s, growth in hospital expenditures outpaced other services, while prescriptions and physicians/clinics saw faster spending growth during the 1980s and 1990s. From 2020 to 2021, retail prescription drugs experienced the fastest growth in spending at 7.8%, following 3.3% annual average growth from 2010 to 2020. Hospitals and physicians/clinics average spending growth between 2020 and 2021 was 4.4% and 5.6%, respectively.

Source: KFF analysis of National Health Expenditure (NHE) data

Relative contributions to total national health expenditures, by service type, 2021

Hospital and physician services represent half of total health spending

Note: ‘Other Health’ includes spending on durable and non-durable products; residential and personal care; administration; net health insurance; and other state, private, and federal expenditures. Other professional services’ includes spending for services provided by chiropractors, optometrists, physical, occupational, and speech therapist, podiatrist, private-duty nurses, and others. Nursing care represents expenditures for nursing care facilities and continuing care retirement communities.

Source: KFF analysis of National Health Expenditure (NHE) data

Per capita out-of-pocket expenditures, 1970-2021

Per capita out-of-pocket expenditures increased in 2021

Note: A constant dollar is an inflation adjusted value used to compare dollar values from one period to another

Source: KFF analysis of National Health Expenditure (NHE) data

Total national health expenditures, by source of funds, 1970 and 2021

Health insurance is a growing share of total health expenditures and out-of-pocket spending is a smaller portion than in 1970

Private insurance expenditures now represent 28.5% of total health spending (up from 20.4% in 1970), and public insurance (which includes Medicare, Medicaid, CHIP, and the Veterans Administration and Department of Defense), represented 42.5% of overall health spending in 2021 (up from 22% in 1970). Although out-of-pocket costs per capita have also been rising, compared to previous decades, they now make up a smaller share of total health expenditures.

Notes: Public insurance in 1970 includes Department of Veterans Affairs, Departement of Defense, Medicare, and Medicaid. In 2021, public insurance includes the same categories listed for 1970, with the addition of CHIP. ‘Other’ includes spending on public health activities, invesment, and third party payers and programs llike worksite health care, the Indian Health Service, and other state and local programs

Source: KFF analysis of National Health Expenditure (NHE) data

Health Expenditures 2010-2021, On Nursing Care by Out of Pocket - Annual %

Between 2019 and 2021 individuals have reduced their out of pocket annual spend on nursing homes by $1.6B (3.5%)

Health Expenditures 2010-2021, On Retail Prescription Drugs by All Sources - Annual %

US prescription drug expenditures averaged a 3.4% annual increase over 10yrs

Health Expenditures 2010-2021, On All Types by Out of Pocket - Annual %

US out of pocket expenses represented 11% of total spent in 2021

U.S. individual's out-of-pocket expenses as a % of total health consumption represented 11% of total spend in 2021, by comparison individuals paid for 40% of their dental care, and 24.5% for nursing/retirement homes, lastly they paid 2.6% of their hospital care.
Why do these %'s vary so wildly and do they suggest a very different relationship that individuals have with different parts of the healthcare landscape?

Health Expenditures 2010-2021, On All Types by Total CMS Programs (Medicaid, CHIP and Medicare) - U.S $ Billions

The Federal Government is currently spending $1.4 Trillion per year on health expenditures

State and Local Goverment Healthcare Expenditures

Total State & local govt. spending on healthcare was down -1.9% or $11.6B in 2020

Total State & local govt. spending on healthcare was down -1.9% or $11.6B in 2020, by comparison, Federal Govt. spending ballooned approx. $200B in just one year, and still remains greatly elevated. It appears that state & local governments relied entirely on federal funding to underwrite their Covid response, & actually saved some healthcare money in the process.
Total State & local govt. sDoes total reliance on federal emergency funding during a national crisis represent a healthy sustainable system, or should state & city leaders be solving for future emergency funds as part of their annual budget process?pending on healthcare was down -1.9% or $11.6B in 2020, by comparison, Federal Govt. spending ballooned approx. $200B in just one year, and still remains greatly elevated. It appears that state & local governments relied entirely on federal funding to underwrite their Covid response, & actually saved some healthcare money in the process.

Individual Out-of-Pocket Hospital Expenditures - $ in Billions

In the last 10 years individual out-of-pocket hospital expenditures have grown at just 20% from $28B in 2011 to $34B in 2021

In the last 10 years individual out-of-pocket hospital expenditures have grown at just 20% from $28B in 2011 to $34B in 2021, while all other hospital expenditures, from commercial payors to Medicaid, Medicare, and DOD, and VA, have increased their hospital expenditures at 3x the rate, ranging from 60 to 70% total increases.
Have our politicians concerted efforts to protect individuals from large hospital expenditures worked? What were the new policies and market changes that brought about this positive outcome? Who has driven the effort to protect individuals?

Health Expenditures 2000-2021, On Physicians & Clinics, Hospitals by All Sources - U.S $ Billions

Outpatient expenditures totaled $864B in 2021, versus Hospital total expenditures which totaled $1.3 trillion for the same period

Health Expenditures 2000-2021, On Home Health by Medicaid, Medicare, Private Health Insurance - U.S $ Billions

Over 70% of all home healthcare in the US is paid for by Medicaid or Medicare

Health Expenditures 2000-2021, On Dental by Out of Pocket, Private Health Insurance, Medicare, Medicaid - U.S $ Billions

80% of all dental care in the U.S. is covered by private health insurance and self-pay

80% of all dental care in the U.S. is covered by private health insurance and self-pay (that's us), while Medicaid and Medicare pick up 12.3% of the tab, why is that? When you consider that the government typically pays for 50 cents of every other healthcare dollar?
Having said that, the government's contribution to dental care has doubled in the past 10 years, with the fastest growth in Medicare, where historically the government paid almost nothing. Why is dental care so different than any other type of health care? Appears the government had decided teeth aren't important.