Home Health Care Spending Rose Modestly in 2016

Health care spending in the United States rose 4.3% in 2016, hitting $3.3 trillion, or $10,348 per person, across all sectors, according to the Centers for Medicare & Medicaid Services (CMS). The pace of home health spending slowed compared to recent years, though total spending in home health ticked up.

“Over the last decade, the US has experienced unique events that have affected the health care sector, including the most severe economic recession since the Great Depression, major changes to the health care system because of the ACA and historic lows in medical price inflation,” said Micah Hartman, a statistician in the Office of the Actuary at CMS and lead author of a Health Affairs article on the results. “In 2016, the slowdown in health care spending followed significant insurance coverage expansions under the ACA and very strong growth in retail prescription drug spending in 2014 and 2015.

Home health care, which represents a 3% share of the health care system, saw spending rise at a slower pace in 2016 compared to the previous year.


Spending for freestanding home health care agencies increased 4% in 2016, to $92.4 billion. In 2015, spending for the sector accelerated 5.8%.

“Slower growth in Medicaid spending (4.6 percent in 2016 from 7.7 percent in 2015), out-of-pocket spending (0.5 percent in 2016 from 3.1 percent in 2015) and private health insurance spending (2.8 percent in 2016 from 6.6 percent in 2015) contributed to slower overall growth in 2016,” CMS’ report reads.

Together, Medicare and Medicaid made up 77% of home health spending in 2016.


Medicare spending overall grew 3.6% to $672.1 billion in 2016, lower than the growth reported in the previous two years. Medicaid spending also decelerated in growth compared to previous years, increasing 3.9% to $565.5 billion. Medicaid spending in 2014 grew 11.5%, and 9.5% in 2015.

Written by Amy Baxter

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