Private health insurance continues to be the largest payer for healthcare goods and services, accounting for just over one-third of total spending.
Healthcare spending grew at a slower rate in 2016 than during the previous two years, according to new analysis released Wednesday by the Office of the Actuary for the Centers for Medicare and Medicaid Services.
In 2016, U.S. healthcare spending grew at a rate of 4.3 percent to $3.3 trillion. This compares to spending increases of 5.1 percent in 2014 and 5.8 percent in 2015.
Spending growth in 2016 was more in line with the rate of 4.2 percent from 2008 to 2015.
The slower growth is primarily due to decelerated spending for retail prescription drugs, hospital care, and on physician and clinical services, according to the Office of the Actuary report.ntions]
Spending growth also fell among the three major payers: private health insurance, Medicare and Medicaid.
The last time there was a spending drop of this type was in 2010, when there was a decrease in the three area of goods and services – retail prescription drugs, hospital care, and physician and clinical services, CMS said.
This is the first time in memory CMS has witnessed a slowdown in goods and services spending, and among the three major payers.
For private health insurance and Medicaid, the slower growth was influenced by decelerated enrollment growth, while Medicare spending slowed because of lower enrollment increases due to defections to Medicare Advantage plans.
Medicare Advantage now makes up a third of all Medicare enrollment. This means slower growth in fee-for-service Medicare spending as MA is value-based.
CMS said it didn’t have details on how other value-based models such as bundled payments have played a part in slower healthcare spending increases.