Home Health Spending Holds Steady As Overall Health Care Spending Slows

While overall U.S. health care spending growth continued to slow in 2017, home health spending growth held steady with its 2016 rate, according to the Centers for Medicare & Medicaid Services (CMS).

Health care spending across all sectors grew at a rate of 3.9% in 2017, compared to rates of 4.8% in 2016 and 5.8% in 2015, according to the CMS study. As such, spending rose to $3.5 trillion, or $10,739 per person.

Meanwhile, in 2017, home health spending grew at a rate of 4.3%, the same as the previous year, to $97 billion. In 2015, the home health spending rate was 5.3%.


Slowed total health care spending growth in 2017 can be attributed to a number of factors, according to the study, which will appear in the January 2019 issue of Health Affairs.

Primary reasons include slower growth in spending for hospital care, physician services, clinical services and retail prescription drugs, “with residual use and intensity of these services contributing substantially to the trend.”

Additionally, slower growth in 2017 for Medicare spending and private health insurance was a factor, but faster Medicare and out-of-pocket spending helped offset it, according to CMS.


“The rate of growth in 2017 was similar to the increases between 2008 and 2013, which preceded the faster growth experienced during 2014–15 — a period that was marked by insurance coverage expansion and large increases in prescription drug spending,” the study in Health Affairs reads. “Slower growth in health care spending in 2017 was mainly attributable to the use and intensity of goods and services, particularly for hospital care, physician and clinical services, and retail prescription drugs.”

The majority of 2017 home health spending can be attributed to Medicare and Medicaid, which together made up 76% of it, according to CMS.

Medicare spending grew 4.2 in 2017 to $705.9 billion, compared with 3.6% in 2016. Meanwhile, Medicare expenditures grew 2.9 percent last year reaching $581.9, compared to 3.9 percent the year before, according to the study.

Written by Bailey Bryant

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