Home Health Spending Tops $77 Billion Despite Low National Growth

The home health industry experienced billion dollar growth in 2012, despite low national health spending overall, according to a recent report from the Centers for Medicare & Medicaid Services (CMS).

While national health spending slowed for the fourth consecutive year at an annual rate of 3.7% in 2012, home health spending growth accelerated 5.1% to $77.8 billion, notes the report published Monday by the CMS Office of the Actuary.

Home health spending in 2012 represents significant growth compared to 2011 when the industry reported a spending increase of 4.1%.


In 2012, Medicare and Medicaid accounted for approximately 81% of total home health care spending, while the former grew at a faster rate than the latter.

Several factors contributed to the nation’s low spending growth overall in 2012, including slower growth in prescription drug, nursing home, private health insurance and Medicare expenditures.

Despite a large uptick in Medicare enrollment in 2012, program spending increased by 4.8% compared to growth of 5% in 2011. Total Medicare spending per enrollee grew 0.7% in 2012.


The Office of the Actuary also found that the impacts of the Affordable Care Act contributed to the slow growth for the Medicare program in 2012, but had a limited impact on overall spending as reforms were still being implemented in 2012.

Medicare also had an impact on nursing home spending, which the report notes is due to a one-time Medicare rate adjustment for skilled nursing facilities.

Free-standing nursing home facilities and continuing care retirement communities increased only 1.6% in 2012, down from 4.3% growth in 2011.

While overall health spending slowed for the fourth consecutive year, 2012 was the second straight year where overall health care costs grew slower than the economy as a whole, said CMS Administrator Marilyn Tavenner, in a statement.

“We will continue to work with tools given to us by the Affordable Care Act that will both help us control costs for taxpayers and consumers while increasing the quality of care,” Tavenner said.

Written by Jason Oliva

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