Growth in U.S. Health Spending Set to Average 5.8 Percent

Growth in U.S. Health Spending Set to Average 5.8 Percent
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FRIDAY, July 15, 2016 (HealthDay News) — Growth in U.S. health spending is expected to average 5.8 percent for 2015 to 2025, according to a study published in the July issue of Health Affairs.

Sean P. Keehan, from the Centers for Medicare and Medicaid Services in Baltimore, and colleagues explored projections for national health expenditure from 2015 to 2025.

The authors note that health spending growth from 2015 to 2025 is expected to average 5.8 percent, which is 1.3 percent faster than growth in the gross domestic product. By 2025, health spending is expected to represent 20.1 percent of the total economy. The initial impact associated with the Affordable Care Act is decreasing, and likely influences on the growth in health spending include changes in economic growth, faster growth in medical prices, and the aging population. The projected growth in national health spending is slower than in the two decades before the recent Great Recession, although it is faster than observed in recent history; growth is influenced in part by trends such as increasing cost sharing in private health insurance plans and Medicare payment update provisions. By 2025, the share of total health expenditures paid by federal, state, and local governments is expected to increase to 47 percent.

“The health sector is in the midst of a unique period, in which various forces are exerting differential pressures on health spending growth,” the authors write.

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