National health spending up 6.2%

ANN ARBOR, Mich. — National health spending in April 2015 was 6.2% higher than in April 2014. At $3.2 trillion, health spending now represents 18.2% of gross domestic product, a new all-time high, according to data come from the monthly Health Sector Economic Indicators briefs released by Altarum Institute’s Center for Sustainable Health Spending. 

 

“The 6.2% health spending growth rate for April is about the same as that for the fourth quarter of 2014 but is well below what we expect to show for the first quarter of 2015 in our next Trend Report due out later this month,” stated Charles Roehrig, director of the Center. “This report will reflect results from the just-released Quarterly Services Survey, which shows 7.3% growth in spending on health care services in the first quarter of 2015 compared to the first quarter of 2014. We expect the first quarter growth rate to represent a peak, and that spending growth will moderate as 2015 continues to unfold.”

 

Prescription drug spending grew the fastest, by 10.5%, but is showing signs of moderation. Hospital spending grew at a rapid 8.5%, presumably driven by increased utilization and less uncompensated care, as prices have been stagnant.

 

Health care prices in April 2015 were 1.2% higher than in April 2014, only two-tenths higher than the decade-plus low of 1% growth registered in August 2013. Hospital prices rose by a low 0.5%, while physician and clinical services prices plunged by 1.1%, reflecting the end of enhanced Medicaid primary care payments. Prescription drug prices rose 5.6%, down from March but still near the 13-year high of 6.4% reached in December 2014.