CALIFORNIA Health Care Almanac JUNE 2021 Health Care Costs 101: Spending Growth Outpaces Economy Health Care Costs 101 Executive Summary Executive Summary Health Care Costs 101: US Spending Growth Outpaces Economy provides a detailed look at national health care spending in 2019, just prior to the onset of the COVID-19 pandemic. CONTENTS National health care spending increased 4.6% in 2019 to $3.8 trillion, growing faster than both the economy (4.0%) Spending Levels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 and consumer prices (1.8%). The 2019 increase was similar to its growth of 4.7% in 2018. In 2019, health care spending Sponsors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 accounted for 17.7% of the economy and averaged $11,582 per person, more than twice the amount spent by most developed countries. Payment Sources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 KEY FINDINGS ABOUT US HEALTH SPENDING IN 2019 INCLUDE: Growth Trends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 • As in prior years, hospital and physician care remained the largest spending categories, accounting for 31% and 20%, Age and Gender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 respectively, of health care spending, followed by prescription drugs at 10%. • Home health care had the largest growth rate in 2019, increasing by 7.7%. Impact of COVID–19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 • The net cost of health insurance category - which includes administrative costs and profit -declined 3.8% in 2019 Data Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 largely due to the suspension of the health insurance providers tax.* Over the past 20 years, the net cost of health insurance was the fastest growing category of spending, with an annual average growth rate of 7.7%. Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46 • Public health insurance ($1.6 trillion), which includes Medicare ($799 billion) and Medicaid ($613 billion), paid for 41% of all spending, while private health insurance ($1.2 trillion) paid for 31%. • Medicare spending grew 6.7% in 2019, driven by growth in both enrollment (2.6%) and per enrollee spending (4.0%). It outpaced growth by private health insurance (3.7%), Medicaid (2.9%), and other payers. • The federal government and households financed similar shares (29% and 28%, respectively) of the nation's health care bill. The largest expenses for households were out-of-pocket spending and contributions to employer- sponsored health insurance. • Federal subsidies for ACA marketplace (individual coverage) premiums and cost sharing totaled $50 billion in 2019, financing 5% of private health insurance spending. See current and past editions of Health Care Costs 101 at www.chcf.org/collection/health-care-costs-spending-almanac. * The Affordable Care Act Provision 9010 established the health insurance providers fee, implemented in 2014. CALIFORNIA HEALTH CARE FOUNDATION 2 Health Care Costs 101 Annual Growth Rates in Health Spending Spending Levels United States, 1969 to 2019 Health care spending grew 4.6% RE C E N T D E TAIL in 2019, similar to the 4.7% rate of 18% 2015 5.6% growth in 2018. The 10-year average 2016 4.6% growth between 2009 and 2019 was 16% 2017 4.3% lower than the 10-year averages from 4.7% 14% 12.8% 2018 prior periods. 2019 4.6% 12% 10% 8% 6% 4.6% 4% 2% 0% 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019 12.9% 11.3% 7.1% 6.9% 4.3% 1 0 - Y E A R AV E R AG E A N N UA L G R O W T H Note: Health spending refers to national health expenditures. Source: Author calculations based on National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 3 Health Care Costs 101 Health Spending Spending Levels United States, 1969 to 2019, Selected Years Health spending reached $3.8 trillion IN BILLIONS in 2019. $5,963 R EC ENT DE TA I L $3,795 2015 $3,178 2016 $3,325 2017 $3,466 2018 $3,630 2019 $3,795 $2,493 $1,274 $220 $642 $65 1969 1979 1989 1999 2009 2019 Notes: Health spending refers to national health expenditures. Sources: National Health Expenditure (NHE) historical data (1960–2019), Centers for Medicare & Medicaid Services (CMS). CALIFORNIA HEALTH CARE FOUNDATION 4 Health Care Costs 101 Health Spending as a Share of GDP Spending Levels United States, 1969 to 2019, Selected Years Over the past 50 years, health care has accounted for a growing share of REC ENT DE TA I L GDP. In 2019, health care's share of 2015 17.4% GDP remained nearly unchanged from 2016 17.7% the prior year, as health care and the 17.7% 2017 2018 17.6% 17.3% 17.7% economy grew at similar rates. 2019 17.7% 13.2% 11.4% 8.4% 6.4% 1969 1979 1989 1999 2009 2019 Notes: Health spending refers to national health expenditures. In 2019, health care's share of GDP reflected a 4.0% increase in gross domestic product (GDP) and a 4.6% increase in national health spending over the prior year. See page 30 for a comparison of economic growth and health spending growth. Sources: National Health Expenditure (NHE) historical data (1960–2019), Centers for Medicare & Medicaid Services (CMS). CALIFORNIA HEALTH CARE FOUNDATION 5 Health Care Costs 101 Health Spending per Capita Spending Levels United States, 2009 to 2019, Selected Years In 2019, US health spending reached $11,582 per person. Per capita $11,582 spending grew at a 10-year annual $10,682 average rate of 3.6% between 2009 $9,930 and 2019. $9,065 $8,606 $8,135 2009 2011 2013 2015 2017 2019 3.6% 1 0 - Y E A R AV E R A G E A N N U A L G R O W T H P E R C A P I TA Notes: Health spending refers to national health expenditures. Sources: National Health Expenditure (NHE) historical data (1960–2019), Centers for Medicare & Medicaid Services (CMS). CALIFORNIA HEALTH CARE FOUNDATION 6 Health Care Costs 101 Health Insurance Spending per Enrollee Spending Levels United States, 2018 and 2019 In 2019, spending per enrollee Medicare in federal- and state-run health ■ 2018 $12,767 ■ 2019 insurance marketplaces such as $13,276 Covered California was 18% higher Medicaid than employer-sponsored insurance $8,123 (ESI). At $13,276 per enrollee, Medicare spending was double ESI $8,485 levels in 2019. Employer-Sponsored $5,837 $6,049 Marketplace $7,129 $7,095 Notes: Employer-sponsored figures include both the employer and worker contribution to premiums. Marketplace is individual health coverage purchased on federal- and state-run health exchanges such as healthcare.gov and Covered California. Marketplace per enrollee spending includes premium and cost-sharing subsidies. Per enrollee spending in 2019 not shown: Medigap ($2,726), other direct purchase insurance ($5,508), and Children's Health Insurance Program ($2,807). Sources: National Health Expenditure (NHE) historical data (1960–2019), Centers for Medicare & Medicaid Services (CMS). CALIFORNIA HEALTH CARE FOUNDATION 7 Health Care Costs 101 Health Insurance Spending per Enrollee Spending Levels United States, 1999 to 2019 Since 1999, the trajectories of Medicare Medicaid Employer-Sponsored Medicaid and Medicare spending Marketplace Other Direct Purchase 20-YEAR have diverged. Shifts in Medicaid GROWTH 4.4% eligibility to cover more children and $13,276 nondisabled adults have contributed to slower growth in Medicaid's per $8,485 $7,095 enrollee spending. The addition 2.0% of prescription drug coverage to Medicare benefits in 2006 increased $5,706 5.4% Medicare spending per enrollee. The sharp increases in marketplace $5,567 $4,371 $6,049 spending in 2017 and 2018 leveled off $5,508 in 2019. $2,115 $1,029 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Notes: Marketplace is individual health coverage purchased on federal- and state-run health exchanges such as healthcare.gov and Covered California. Marketplace per enrollee spending includes premium and cost-sharing subsidies. Twenty-year growth percentages are average annual (1999–2019). Sources: National Health Expenditure (NHE) historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 8 Health Care Costs 101 Major Programs as a Share of the Federal Budget Spending Levels United States, 1970 to 2020 Federal spending overall increased Defense Social Security Medicare Medicaid by 47% in 2020, largely due to the government response to the COVID- 19 pandemic. As a result, spending 41.9% as a share of federal outlays plunged for major pre-pandemic programs. Between 2019 and 2020, Medicare 16.6% 14.0% fell from 17.4% to 14.0% of outlays, 10.9% Medicaid fell from 9.2% to 7.0%, 7.0% defense fell from 15.2% to 10.9%, and social security fell from 23.4% to 16.6%. 14.5% 3.4% 1.2% 1970 1980 1990 2000 2010 2020 Notes: Spending shares computed as percentages of federal outlays. Outlays reflect federal spending only (e.g., Medicaid outlays shown reflect federal portion). 2020 figures reflect increases of 5.5%, 4.9%, 18.3% and 12.0% in defense, social security, Medicare, and Medicaid outlays and an increase in total outlays of 47.3%. Source: Author calculations based on "Historical Budget Data," in The Budget and Economic Outlook: 2021 to 2031, Congressional Budget Office, February 2021. CALIFORNIA HEALTH CARE FOUNDATION 9 Health Care Costs 101 Health Spending per Capita and as a Share of GDP Spending Levels Selected Developed Countries, 2018 Health spending in the US far ■ Other $10,637 exceeded that of other developed 0500.0 ■ Out-of-Pocket ■ Government and Compulsory countries, both in terms of per capita 9187.5 spending and as a percentage of GDP. 7875.0 US health spending per capita was $6,224 more than twice that of most other 6562.5 $5,287 developed countries shown. $5,154 5250.0 $4,290 3937.5 $3,485 $3,085 2625.0 $1,145 1312.5 0.0 Mexico Korea Italy United Kingdom France Canada* Germany United States P E R C E N TA G E O F G D P 5.5% 7.6% 8.7% 10.0% 11.3% 10.8% 11.5% 16.9% *Provisional values Notes: US spending per capita as reported by the OECD differs from figures reported elsewhere in this report. GDP is gross domestic product. Government and compulsory includes publicly funded (including Medicare, Medicaid, Veterans Affairs, and Dept. of Defense), employer-sponsored, and individually purchased health insurance. Out-of-pocket is consumer spending on copays, deductibles, and goods and care not covered by insurance; it does not include premiums. Other is total spending less government and compulsory spending and out-of-pocket spending. Source: "OECD Health Statistics 2020: Frequently Requested Data," OECD, June 2020. CALIFORNIA HEALTH CARE FOUNDATION 10 Health Care Costs 101 Health Spending by Medical Condition Spending Levels United States, 2018 IN BILLIONS In 2018, when classifying health Routine Care, Signs and Symptoms spending by medical condition, the $350 Circulatory System Diseases most money was spent on routine $274 Musculoskeletal System Diseases care ($350 billion), followed by $245 Nervous System Diseases circulatory system conditions (includes $198 Respiratory System Diseases hypertension and heart disease). $186 Endocrine System Diseases $171 Neoplasms $157 Injury and Poisoning $143 Infectious Diseases $136 ALL CONDITIONS Total Spending $2.5 trillion Digestive System Diseases $133 Genitourinary System Diseases $127 Mental Illness $122 Other $98 Skin Diseases $65 Pregnancy $55 Notes: Spending on medical conditions (shown) accounted for 84% of the $2.9 trillion in 2018 health care spending under the health care satellite accounts. Spending on medical services by provider, such as dental services and nursing homes, and medical products, appliances, and equipment are not shown. See Appendix C for more detail. 0.00 38.752000–18, Health77.50 Source: Blended Account, 116.25 of Economic155.00 Care Satellite Account,Bureau Analysis, March 16,193.75 2021. 232.50 271.25 310.00 CALIFORNIA HEALTH CARE FOUNDATION 11 Health Care Costs 101 Health Spending Distribution, by Spending Category Spending Levels United States, 2019 Hospital and physician services Investment combined represented about half of Public Health Activity 5% health care spending. Prescription 3% Government Administration (1%) Net Cost of Health Insurance drugs, the third-largest category, 6% accounted for another 10%. Other Health Care Hospital 5% Care Home Health Care 31% 3% TOTA L SPEN D IN G $3.8 trillion 5% Nursing Care Facilities Personal Health Care 4% Other Medical Products 84% Physician Rx Drugs 10% S P E N D I N G C AT E G O R Y D E F I N I T I O N S and Clinical Government administration includes the administrative costs of government health care programs such as Services 3% Medicare and Medicaid. Investment is noncommercial research, structures, and 20% 4% Other Professional Services equipment. Net cost of health insurance reflects the difference Dental Services between benefits and premiums for private insurance and includes administrative expenses, premium taxes, and profits. Notes: Health spending refers to national health expenditures. Segments may not sum to 100% due to rounding. For additional detail on spending categories, see page 15 and Appendix Other health care refers to other health, residential, and A. The periodic revision to health spending accounts that impacted the 1960–2019 data resulted in a decrease in spending attributable to hospitals, as some hospital spending was personal care. reclassified as physician and clinical. Other medical products is durable medical equipment Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. and nondurable medical products. CALIFORNIA HEALTH CARE FOUNDATION 12 Health Care Costs 101 Personal Health Care Spending, Adjusted for Inflation Spending Levels United States, 1969 to 2019, Selected Years In inflation-adjusted dollars,* per $8,962 9000 IN 2012 REAL DOLLARS PER CAPITA capita spending grew fourfold, from ■ All Other $2,240 per person in 1969 to $8,962 8000 ■ Dental Services ■ Nursing Care Facilities $7,336 in 2019. Possible reasons for this 7000 ■ Prescription Drugs growth include changes in the volume ■ Physician and Clinical Services and mix of services, technological 6000 ■ Hospital Care $5,607 advances, and shifts in the age mix of 5000 $4,379 the population. 4000 $3,378 3000 $2,240 2000 1000 0 1969 1979 1989 1999 2009 2019 AV E R AGE A NN UA L I NC R EASE OVE R P R I O R P E R I O D 4.2% 2.6% 2.5% 2.7% 2.0% Notes: Personal health care spending excludes government administration, the net cost of health insurance, public health activities, research, and investment. For additional detail on *Inflation adjustments remove the impact of changes spending categories, see Appendix A. in health care prices. For further information on price Source: Author calculations based on National Health Expenditure (NHE) historical data (1960–2019), Centers for Medicare & Medicaid Services (CMS), including unpublished CMS data deflators, see Definitions, Sources, and Methods and NHE associated with NHE Tables, CMS, table 23. Deflator Methodology at www.cms.gov. CALIFORNIA HEALTH CARE FOUNDATION 13 Health Care Costs 101 Factors Contributing to Per Capita Spending Growth Spending Levels United States, 2015 to 2019 The volume and mix of services grew by 2.5%, accounting for more than 2015 2016 2017 2018 2019 half of the 2019 increase in per capita Nonprice Factors 4.1% 2.5% 2.5% 1.9% 2.9% spending. Economy-wide inflation Volume and Mix of Services 3.5% 2.0% 1.9% 1.4% 2.5% rose 1.8%, which accounted for about Demographic Factors 0.6% 0.5% 0.6% 0.5% 0.5% a quarter of the increase. Medical- Price Factors 0.8% 1.3% 1.1% 2.3% 1.1% specific price inflation - above and Economy-Wide Inflation 1.0% 1.1% 1.9% 2.4% 1.8% beyond economy-wide inflation - was Medical-Specific Price Inflation -0.2% 0.2% -0.8% -0.1% -0.7% negative for the third consecutive year. Net Growth Per Capita Health Spending 4.9% 3.8% 3.6% 4.2% 4.1% Note: Volume and mix of services, also referred to as "residual use and intensity," is calculated by removing the effects of demographic factors, and price growth from the nominal expenditure level. Demographic factors reflect age and time-to-death. Sources: Anne B. Martin et al., "National Health Care Spending In 2019: Steady Growth for the Fourth Consecutive Year," Health Affairs 40, no. 1 (Jan. 2021), exhibit 3; and unpublished data points related to article's Exhibit 3 provided by Office of the Actuary, Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 14 Health Care Costs 101 Health Spending Summary, by Category Spending Levels United States, 2018, 2019, and 20-Year Look Back Health care spending growth in SPENDING DISTRIBUTION GROWTH 2019 (4.6%) was lower than the 20 (IN BILLIONS) year average (5.6%). Hospital care 1999 2018 2019 1999 2018 2019 1999–2019 2018 2019 National Health Expenditures $1,273.6 $3,629.7 $3,795.4 100% 100% 100% 5.6% 4.7% 4.6% has remained the largest spending Hospital Care 393.6 1,122.5 1,192.0 31% 31% 31% 5.7% 4.2% 6.2% category. In 2019, the largest growth Physician and Clinical Services 269.5 738.2 772.1 21% 20% 20% 5.4% 4.0% 4.6% occurred in home health care (7.7%). Dental Services 57.3 137.4 143.2 4% 4% 4% 4.7% 4.8% 4.2% The net cost of health insurance Other Professional Services 34.6 103.9 110.6 3% 3% 3% 6.0% 7.5% 6.5% category, often one of the fastest Nursing Care Facilities 80.6 167.2 172.7 6% 5% 5% 3.9% 2.3% 3.3% growing, declined 3.8%, mainly due Home Health Services 32.8 105.4 113.5 3% 3% 3% 6.4% 5.5% 7.7% to suspension of the health insurance Other Health Care 59.2 191.3 193.6 5% 5% 5% 6.1% 3.0% 1.2% Prescription Drugs 105.3 349.8 369.7 8% 10% 10% 6.5% 3.8% 5.7% providers tax.* *The Affordable Care Act Provision 9010 established the Other Medical Products 46.3 132.6 139.6 4% 4% 4% 5.7% 4.2% 5.3% health insurance providers fee, implemented in 2014. Net Cost of Health Insurance 54.8 249.5 239.9 4% 7% 6% 7.7% 13.9% -3.8% S P E N D I N G C AT E G O R Y D E F I N I T I O N S Government administration includes the administrative Government Administration 14.5 47.3 49.0 1% 1% 1% 6.3% 5.1% 3.5% costs of government health care programs such as Medicare and Medicaid. Public Health Activities 40.7 94.5 97.8 3% 3% 3% 4.5% 2.6% 3.5% Investment is noncommercial research, structures, and equipment. Investment 84.4 190.2 201.7 7% 5% 5% 4.5% 4.8% 6.0% Net cost of health insurance reflects the difference between benefits and premiums for private insurance and includes administrative expenses, premium taxes, and profits. Other health care refers to the category other health, Notes: Health spending refers to national health expenditures. Growth for 1999–2019 is average annual rate; 2018 and 2019 are annual rates. For additional detail on spending residential, and personal care. categories, see Appendix A. Further definitions available at www.cms.gov. Other medical products is durable medical equipment Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. and nondurable medical products. CALIFORNIA HEALTH CARE FOUNDATION 15 Health Care Costs 101 Health Spending Distribution, by Sponsor Sponsors United States, 2019 Sponsors finance the nation's health care by paying insurance premiums, out-of-pocket expenses, and payroll taxes, or by directing general tax State and Local Private Government Business revenues to health care. In 2019, 16% 19% the federal government (29%) and households (28%) were the largest sponsors, followed by private business TOTAL SPEN D I N G at 19%. $3.8 trillion Federal Government Household 29% 28% SPONSOR DEFINITIONS Federal government sponsors health care via general tax revenues, plus payroll tax and employer contributions to health insurance premiums for its workers. Other Households sponsor health care through out-of-pocket Private costs, health insurance premiums, and payroll taxes. Other private revenues include philanthropy, investment Revenues income, and private investment in research, structures, and equipment. 7% Private business sponsors health care through employer contributions to health insurance premiums and payroll taxes. State and local government sponsors health care Notes: Health spending refers to national health expenditures. Sponsors are the entities ultimately responsible for financing the health care bill. See page 18 for trend data. programs and pays payroll taxes and health insurance Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. premiums for its workers. CALIFORNIA HEALTH CARE FOUNDATION 16 Health Care Costs 101 Health Spending Distribution, Sponsor Detail Sponsors United States, 2019 IN BILLIONS Medicaid was the largest component Federal Government $1,102.3 (36%) of health spending by the 36% Medicaid 32% Medicare federal government, followed by 23% Other Health Programs (excluding Medicare) 5% Marketplace Tax Credits and Subsidies Medicare (32%). Marketplace tax 4% Private Insurance Premiums (employer contribution) <1% Medicare Payroll Tax (employer contribution) credits and subsidies were 5% of Households $1,076.4 federal government health spending. 38% Out-of-Pocket Health Spending 27% Employer-Sponsored Private Insurance Premiums (employee or enrollee share) Out-of-pocket spending accounted $ 16% Medicare Payroll Tax (employee or enrollee share) for the largest share (38%) of 9% Medicare Part B & D Premiums TOTA L SPEND ING 7% Direct Purchase Insurance (household contribution)* $3.8 trillion household health spending. Employer 3% Medical Portion of Property and Casualty Insurance contributions to workers' health Private Business $724.5 76% Private Insurance Premiums (employer contribution) insurance premiums made up the 16% Medicare Payroll Tax (employer contribution) 7% Workers' Compensation and Other majority (76%) of private business State and Local Government $609.3 health spending. 38% Medicaid 31% Private Insurance Premiums (employer contribution) 28% Other Health Programs 3% Medicare Payroll Tax (employer contribution) *Includes premiums paid by individuals for marketplace plans, Medigap, and other directly purchased health insurance. Notes: Health spending refers to national health expenditures. Sponsors are the entities ultimately responsible for financing the health care bill. Other health programs includes Department of Defense and Veterans Affairs health care, Maternal and Child Health, and Children's Health Insurance Program (CHIP). Marketplace is individual coverage purchased on federal- and state-run health exchanges, such as healthcare.gov and Covered California. Medicaid buy-in premiums for Medicare are reflected under Medicaid. Household spending excludes government-paid advance premium tax credit and cost-sharing reductions. Not shown: other private revenues ($282.9 billion), which includes philanthropy, investment income, and private investment in research, structures, and equipment. Figures may not total 100% due to rounding. Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 17 Health Care Costs 101 Health Spending Distribution, by Sponsor Sponsors United States, 2009 to 2019 Over the past 10 years, sponsors' share Household Federal Government Other Private Revenues of spending has remained relatively Private Business State and Local Government 35% steady. Federally funded Medicaid expansion under the ACA 29.1% (2014) 29.0% 30% 27.6% 28.4% 25% 20.4% 19.1% 20% 16.2% 15% Increased federal Medicaid funds 16.1% for states as part of recession relief (2009) 10% 6.6% 5% 7.5% 0% 2009 2011 2013 2015 2017 2019 Notes: Health spending refers to national health expenditures. Sponsors are the entities ultimately responsible for financing the health care bill. See page 17 for detail on how sponsors finance health care spending. Other private revenues includes philanthropy, investment income, and private investment in research, structures, and equipment. Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 18 Health Care Costs 101 Health Spending Summary, by Sponsor Sponsors United States, 2018, 2019, and 20-Year Look Back Over the past 20 years, federal SPENDING GROWTH government spending on health care DISTRIBUTION (IN BILLIONS) grew at an average rate of 7.8% per 1999 2018 2019 1999 2018 2019 1999–2019 2018 2019 National Health Expenditures $1,273.6 $3,629.7 $3,795.4 100% 100% 100% 5.6% 4.7% 4.6% year, faster than spending by other Private Business 304.8 698.3 724.5 24% 19% 19% 4.4% 5.7% 3.7% sponsors. The federal government's Household 406.1 1,030.1 1,076.4 32% 28% 28% 5.0% 4.8% 4.5% share of national health spending Other Private Revenues 105.9 264.2 282.9 8% 7% 7% 5.0% 2.4% 7.1% increased from 19% in 1999 to 29% Federal Government 247.7 1,042.2 1,102.3 19% 29% 29% 7.8% 5.4% 5.8% in 2019 while the share of health State and Local Government 209.1 594.8 609.3 16% 16% 16% 5.5% 3.3% 2.4% spending sponsored by private business and households decreased. Notes: Health spending refers to national health expenditures. Sponsors are the entities ultimately responsible for financing the health care bill. Growth for 1999–2019 is average annual rate; 2018 and 2019 are annual rates. Other private revenues includes philanthropy, investment income, and private investment in research, structures, and equipment. Figures may not total 100% due to rounding. See page 17 for detail on how sponsors finance health care spending. Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 19 Health Care Costs 101 Sponsors of Private Health Insurance Spending Sponsors United States, 2019 Total spending on private health insurance was $1.2 trillion in 2019. State and Local: Private business and households were Contribution to ESI Federal: Other (<1%) the largest funders of private health 16% Federal: Marketplace insurance, accounting for 46% and 4% Credits and Subsidies 30%, respectively. In addition to Private Government Federal: 3% Business TOTA L 24% Contribution to ESI contributing to government workers' insurance premiums, the federal 46% P R I VAT E H E ALT H I N SU R AN CE SP E N D I N G 6% Direct Purchase government spent $50 billion on $1.2 trillion Insurance Contribution marketplace tax credits and cost- to ESI sharing subsidies. Household 30% Contribution to ESI 24% Notes: Sponsors are the entities ultimately responsible for financing the health care bill. ESI is employer-sponsored insurance. Marketplace is individual health insurance coverage purchased on federal- and state-run health exchanges, such as healthcare.gov and Covered California. Direct purchase insurance includes premiums paid by individuals for marketplace plans, Medigap, and other directly purchased health insurance. Segments may not total 100% due to rounding. Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 20 Health Care Costs 101 Sponsors of Medicare Spending Sponsors United States, 2019 State and Local: Payroll Tax and Other Contributions Medicare is financed by general Federal: Payroll Tax (1%) revenues, payroll taxes, and 4% Federal: Buy-in Premiums premiums. In 2019, the payroll taxes Private for Dual Eligibles (1%) contributed by employees, businesses, Business 15% and government accounted for Payroll Tax about 39%† of Medicare spending. 15% Part B and Part D Premiums paid by Payroll Tax* Government individuals were 12%, while general 22% TOTAL MEDIC ARE SPENDING 51% revenues and other sources accounted $799 billion Household for the remaining half. 34% Federal: General Revenues and Part B & D Net Trust Fund Premiums Spending 12% 45% *Includes employee and self-employed tax, and voluntary premiums paid to Medicare Hospital Insurance Trust Fund (Part A). Notes: Sponsors are the entities ultimately responsible for financing the health care bill. Medicare Part B premiums cover professional services, and Part D premiums cover prescription † Payroll contributions by sponsor: households (22%), drugs. Segments may not total 100% due to rounding. business (15%), federal government (1%), and state and Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. local government (2%). CALIFORNIA HEALTH CARE FOUNDATION 21 Health Care Costs 101 Health Spending Distribution, by Payer Payment Sources United States, 2019 In 2019, all public health insurance Public Health Activities combined paid for 41% of health Investment spending. Medicare paid for 21% 3% PRIVATE HEALTH INSURANCE 5% $1.2 TRILLION Employer-Sponsored 89% and Medicaid paid for 16% of health Other Marketplace 6% spending. Private health insurance Medigap 3% Payers Other Direct Purchase 2% paid for 31% of health spending. 9% Private Health Insurance Consumers' out-of-pocket spending 31% on health accounted for 11%. Out-of-Pocket 11% TOTAL S P EN D ING $3.8 trillion 4% Other Medicaid Public Health Public 16% Insurance PAY E R D E F I N I T I O N S Medicare 41% 21% Investment is noncommercial research, structures, and equipment. Other payers includes worksite health care, Indian Health Services, workers' compensation, maternal and child health, and vocational rehabilitation. Other public (insurance) includes Departments of Defense and Veterans Affairs health care and the Children's Health Insurance Program (CHIP). Out-of-pocket includes consumer spending on copays, Notes: Health spending refers to national health expenditures. Segments may not total 100% due to rounding. deductibles, and goods and care not covered by insurance; Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. it does not include premiums. CALIFORNIA HEALTH CARE FOUNDATION 22 Health Care Costs 101 Health Spending Distribution, by Payer Payment Sources United States, 1969 to 2019 Over time, the out-of-pocket share 100% - 5% Investment of spending has shrunk, while public - 3% Public Health Activity - 9% Other Payers insurance (specifically Medicare and - 11% Out-of-Pocket Medicaid, and Other Public) has 80% expanded. Between 1969 and 2019, - 4% Other Public Insurance the share of consumer out-of-pocket - 16% Medicaid spending decreased from 33% to 60% 11%, while the share of public - 21% Medicare insurance increased from 22% to 40% 41%. - 31% Private Health Insurance 20% PAY E R D E F I N I T I O N S Other payers includes worksite health care, Indian Health Services, workers' compensation, Maternal and Child Health, and vocational rehabilitation. 0% Other public insurance includes Departments of Defense 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019 and Veterans Affairs health care and the Children's Health Insurance Program. Out-of-pocket includes consumer spending on copays, deductibles, and goods and care not covered by insurance; it does not include premiums. Note: Health spending refers to national health expenditures. Investment is noncommercial research, structures, and Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. equipment. CALIFORNIA HEALTH CARE FOUNDATION 23 Health Care Costs 101 Health Spending Distribution, by Payer Payment Sources United States, 2018 and 2019 The health spending distribution Private Health Insurance remained relatively unchanged 31.7% 31.5% between 2018 and 2019. Medicare 20.6% 21.1% Medicaid ■ 2018 16.4% ■ 2019 16.2% Other Public Insurance 3.8% 3.8% Out-of-Pocket 10.7% 10.7% PAY E R D E F I N I T I O N S Other public insurance includes Departments of Defense and Veterans Affairs health care and the Children's Health Insurance Program. Notes: Health spending refers to national health expenditures. Projections shown as P and based on current law as of December 2019. See page 23 for historical distribution. Not shown: Out-of-pocket includes consumer spending on copays, other payers, public health activities, and investment, which totaled 16.7% and 16.8% in 2018 and 2019, respectively. deductibles, and goods and care not covered by insurance; Sources: National Health Expenditure (NHE) historical data, 1960–2019, Centers for Medicare & Medicaid Services (CMS); and NHE projections (2020–29), CMS. it does not include premiums. CALIFORNIA HEALTH CARE FOUNDATION 24 Health Care Costs 101 Health Spending Summary, by Payer Payment Sources United States, 2018, 2019, and 20-Year Look Back In 2019, Medicare spending was the SPENDING DISTRIBUTION GROWTH fastest-growing payer (6.7%), driven (IN BILLIONS) by increases in both enrollment and 1999 2018 2019 1999 2018 2019 1999–2019 2018 2019 National Health Expenditures $1,273.6 $3,629.7 $3,795.4 100% 100% 100% 5.6% 4.7% 4.6% per enrollee spending. Medicaid grew Out-of-Pocket 180.8 388.8 406.5 14% 11% 11% 4.1% 3.8% 4.6% more slowly (2.9%) in 2019 than Private Health Insurance 401.0 1,152.2 1,195.1 31% 32% 31% 5.6% 5.6% 3.7% other payers, likely due to declines in Medicare 213.2 749.1 799.4 17% 21% 21% 6.8% 6.3% 6.7% enrollment. Medicaid 183.5 596.0 613.5 14% 16% 16% 6.2% 3.1% 2.9% • Federal 107.2 372.1 387.5 8% 10% 10% 6.6% 3.4% 4.1% • State and Local 76.3 223.8 226.0 6% 6% 6% 5.6% 2.6% 1.0% Other Public Insurers 31.9 136.5 144.8 3% 4% 4% 7.9% 3.3% 6.1% Other Payers 138.1 322.5 336.6 11% 9% 9% 4.6% 3.5% 4.4% Public Health Activities 40.7 94.5 97.8 3% 3% 3% 4.5% 2.6% 3.5% Investment 84.4 190.2 201.7 7% 5% 5% 4.5% 4.8% 6.0% PAY E R D E F I N I T I O N S Other payers includes worksite health care, Indian Health Services, workers' compensation, Maternal and Child Health, and vocational rehabilitation. Other public insurance includes Departments of Defense and Veterans Affairs health care and the Children's Health Insurance Program. Out-of-pocket includes consumer spending on copays, deductibles, and goods and care not covered by insurance; it does not include premiums. Notes: Health spending refers to national health expenditures. Growth for 1999–2019 is average annual rate; 2018 and 2019 are annual rates. Columns may not sum due to rounding. Investment is noncommercial research, structures, and Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. equipment. CALIFORNIA HEALTH CARE FOUNDATION 25 Health Care Costs 101 Out-of-Pocket Spending per Capita Payment Sources United States, 1969 to 2019, Selected Years Out-of-pocket spending on health care reached $1,241 per person 1500 AS A SHARE OF TOTAL PER CAPITA HEALTH SPENDING in 2019. Although out-of-pocket 33% spending has risen steadily, its share 1200 23% of total health spending has declined. 19% 14% 12% $1,241 In 1969, the $105 spent out of pocket 11% accounted for 33% of the $315 per 1969 1979 1989 1999 2009 2019 900 capita health spending. In 2019, the $968 $1,241 spent out of pocket was about 11% of the $11,582 spent per capita. 600 $647 $488 300 $219 $105 0 1969 1979 1989 1999 2009 2019 Notes: Health spending refers to national health expenditures. Figures are not adjusted for inflation. Source: Author calculations based on National Health Expenditure historical data (1969–2019), Centers for Medicare & Medicaid Services (CMS), and related unpublished CMS data. CALIFORNIA HEALTH CARE FOUNDATION 26 Health Care Costs 101 Personal Health Care, by Payer and Spending Category Payment Sources United States, 2019 Personal Health Care: $3.2 trillion The payer mix for health care differed DOLLARS IN BILLIONS Nursing by spending category. For example, Care Dental Home All Other Care Hospital Care Physician and Clinical Services Prescription Drugs Facilities Services Health and Products $1,192.0 $772.1 $369.7 $172.7 $143.2 $113.5 $443.8 most prescription drugs were paid $438.1 $305.0 $164.6 $18.0 $61.8 $16.6 $60.0 for by private health insurance and $45.6 Medicare, while most dental care was $12.5 $138.2 paid for by private health insurance $3.3 $44.0 and out of pocket. $35.9 $14.1 $121.1 $60.6 $60.0 $53.7 $38.2 $69.6 $92.1 $315.8 $4.3 $193.0 $104.6 $45.1 $50.8 $36.3 $127.5 $206.6 $1.7 $1.9 $83.3 $31.4 $13.7 $74.4 $38.1 $11.0 $6.0 $4.0 $0.9 $3.5 Private Health Insurance Out-of-Pocket Other Payers Medicare Medicaid Other Public Insurance Notes: All other care and products includes durable medical equipment, other nondurable medical products, other professional services, and other health, residential, and personal care. Segments may not sum due to rounding. For additional detail on spending categories, see Appendix A. Further definitions available at www.cms.gov. Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 27 Health Care Costs 101 Health Spending Distribution, Private Insurance vs. Out-of-Pocket Payment Sources United States, 2019 In 2019, hospital care and physician Hospital Care 37% services were the largest spending 9% categories for private insurance. Physician and 26% Clinical Services 15% In contrast, the largest spending Prescription Drugs 14% category for out-of-pocket spending 13% was other medical products, which Net Cost of 11% Health Insurance 0% 13% includes eyeglasses and over-the- ■ Private Insurance Dental Services 5% $1,195 billion counter medications. 15% ■ Out-of-Pocket Other Professional 3% $407 billion Services 7% Nursing Care Facilities 2% 11% Home Health Care 1% 3% Other Health Care 1% 1% S P E N D I N G C AT E G O R Y D E F I N I T I O N S Other Medical 1% Net cost of health insurance reflects the difference between benefits and premiums for private insurance and Products 26% includes administrative expenses, premium taxes, and profits. Other health care refers to other health, residential, and personal care. Notes: Health spending refers to national health expenditures. For additional detail on spending categories, see Appendix A. Further definitions available at www.cms.gov. Other medical products is durable medical equipment Source: Author calculations based on National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. and nondurable medical products. CALIFORNIA HEALTH CARE FOUNDATION 28 Health Care Costs 101 Health Spending Distribution, Medicare vs. Medicaid Payment Sources United States, 2019 The largest spending category for Hospital Care 40% both Medicare and Medicaid was 34% 24% hospital care. Medicaid's second- Physician and Clinical Services 14% largest spending category was other 13% Prescription Drugs 5% health care, which includes Medicaid 6% home- and community-based waiver Net Cost of Health Insurance 6% programs that provide alternatives to Home Health Care 6% ■ Medicare 6% $799 billion long-term institutional services. Nursing Care Facilities 5% ■ Medicaid 8% $613 billion Other Professional Services 4% 1% Government Administration 2% 5% Other Medical Products 1% 1% S P E N D I N G C AT E G O R Y D E F I N I T I O N S Other Health Care 1% Government Administration includes the administrative costs of government health care programs such as 18% Medicare and Medicaid. % Net cost of health insurance reflects the difference Dental Services <1% between benefits and premiums for private insurance 2% and includes administrative expenses, premium taxes, and profits. Other health care refers to the category other health, residential, and personal care. Notes: Health spending refers to national health expenditures. For additional detail on spending categories, see Appendix A. Further definitions available at www.cms.gov. Other medical products is durable medical equipment Source: Author calculations based on National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. and nondurable medical products. CALIFORNIA HEALTH CARE FOUNDATION 29 Health Care Costs 101 Health Spending vs. Inflation and the Economy Growth Trends United States, 1969 to 2019 In general, health spending has Health Spending CPI GDP outpaced both inflation and economic 18% Spending growth peaked: 16.0% 19 million gained coverage* (2014–15) growth over the last 50 years. (1981) 16% OPEC oil crisis RECESSION PERIODS ACA implemented (1974) (2014) 14% 12.8% Lowest spending growth: 3.0% (2013) 12% 10% 8.2% 8% 6% 5.5% 4.6% 4% 4.0% 2% 1.8% 0% -2% 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019 *12.4 million additional Medicaid (+21%); 9.3 million additional privately insured (+4.9%). Notes: Health spending refers to national health expenditures. CPI is consumer price index and GDP is gross domestic product. See page 14 for detail on the components of health spending growth. Sources: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services; and "Consumer Price Index," US Bureau of Labor Statistics. CALIFORNIA HEALTH CARE FOUNDATION 30 Health Care Costs 101 Annual Growth, by Spending Category Growth Trends United States, 2019 2 0 -YEA R GR OW T H In 2019, home health care spending Home Health Care 7.7% 6.4% grew faster than other spending Other Professional Services 6.5% 6.0% categories. The net cost of insurance Hospital Care shrank 3.8% due to the suspension 6.2% 5.7% Investment of the health insurance providers tax* 6.0% 4.5% in 2019. Spending on prescription Prescription Drugs 5.7% 6.5% drugs grew by 5.7%, largely due Other Medical Products to an increase in the number of 5.3% 5.7% Physician and Clinical Services prescriptions dispensed. 4.6% 5.4% Dental Services 4.2% 4.7% Public Health Activities *The Affordable Care Act Provision 9010 established the 3.5% 4.5% health insurance providers fee, implemented in 2014. Government Administration ■ Personal Health Care S P E N D I N G C AT E G O R Y D E F I N I T I O N S 3.5% ■ Other Spending 6.3% Government administration includes the administrative Nursing Care Facilities Categories costs of government health care programs such as Medicare and Medicaid. 3.3% 3.9% Investment includes noncommercial research, structures, Other Health Care and equipment. 1.2% 6.1% Net cost of health insurance reflects the difference between benefits and premiums for private insurance Net Cost of Health Insurance and includes administrative expenses, premium taxes, and profits. -3.8% OVERALL: 4.6% 7.7% Other health care refers to other health, residential, and personal care. Notes: Twenty-year growth percentages are average annual (1999–2019). For additional detail on spending categories, see Appendix A. Further definitions available at www.cms.gov. Other medical products is durable medical equipment Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. and nondurable medical products. CALIFORNIA HEALTH CARE FOUNDATION 31 Health Care Costs 101 Annual Growth in Health Spending, by Sponsor Growth Trends United States, 2019 2 0 -YEAR Among sponsors of health care, the Other Private Revenues G ROW T H federal government and other private 7.1% 5.0% revenues had the highest growth rates in 2019. State and local government Federal Government spending grew more slowly, due in 5.8% 7.8% part to the low increase (1.0%) in Household state Medicaid spending. 4.5% 5.0% Private Business 3.7% 4.4% State and Local Government 2.4% 5.5% OVERALL: 4.6% 0.000 0.875 1.750 2.625 3.500 4.375 5.250 6.125 7.000 Notes: Health spending refers to national health expenditures. Sponsors are the entities that are ultimately responsible for financing the health care bill. Other private revenues includes philanthropy, investment income, and private investment in research, structures, and equipment. See pages 16, 17, and 19 for detail on how sponsors finance health care spending. Twenty-year growth percentages are average annual (1999–2019). Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 32 Health Care Costs 101 Annual Growth, Largest Spending Categories Growth Trends United States, 1999 to 2019 Growth in the largest health care Hospital Care Physician and Clinical Services Rx Drugs CPI categories routinely exceeded growth 20% in the CPI. Over the past 20 years, 18% hospital care and physician and clinical services have had similar 16% growth paths. Growth in prescription 14% drug spending has been more volatile, 12% 18.9% 5.1% ranging from -0.3% to 18.9%. 10% 5.0% 2.2% 8% 2 0 -YEA R 6% GR OW T H 4% 6.2% 5.7% 5.7% 6.5% 2% 4.6% 5.4% 0% 1.8% 2.2% -2% 1999 2009 2019 Notes: Health spending refers to national health expenditures. CPI is consumer price index. Twenty-year growth percentages are average annual (1999–2019). Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 33 Health Care Costs 101 Annual Growth in Household Health Care Spending Growth Trends United States, 2019 Overall household spending grew Employer-Sponsored Insurance by 4.5% in 2019. Household 6.3% contributions to employer-sponsored Medicare Part B and D Premiums insurance increased the fastest 5.9% (6.3%), while spending on direct Out-of-Pocket purchase insurance declined. The 4.6% decline was driven, in part, by a Medicare Payroll Tax decrease in enrollment in insurance 4.0% purchased directly from non- Medical Portion of Property and Casualty Insurance marketplace plans. 0.0% Direct Purchase Insurance -0.8% Overall Household 4.5% Notes: Health spending refers to national health expenditures. Direct purchase insurance includes premiums paid by individuals for marketplace plans, Medigap, and other directly purchased health insurance. Marketplace is individual health insurance coverage purchased on federal- and state-run health exchanges, such as healthcare.gov and Covered California. Household health care spending excludes any subsidies provided for premiums or cost sharing by the ACA. Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 34 Health Care Costs 101 Annual Growth in Health Spending, by Sponsor Growth Trends United States, 2009 to 2019 Federal Gov't State and Local Gov't Household Private Business The impact of federal policy decisions 20% and economic conditions can be seen ACA implementation, millions gained coverage in the acceleration and deceleration of Federal Medicaid assistance to states (2014) increased via recovery program health care spending. For example, in (2009) 15% Enhanced Medicaid 2014, federal spending increased as 16.8% assistance to states expired the ACA was implemented. 3.8% (2011–12) 0.4% 10% 0.0% -1.5% Health 5.8% 5% Spending 4.6% 4.5% 3.7% 2.4% 0% Rising unemployment led to decline Strong labor market increased of 6.5 million people covered by enrollment in employer-sponsored employer-sponsored insurance insurance (5.4 million) (2015–2018) (2009) -5% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Notes: Health spending refers to national health expenditures. Sponsors are the entities that are ultimately responsible for financing the health care bill. See pages 16, 17, and 19 for detail on how sponsors finance health care spending. Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 35 Health Care Costs 101 Annual Growth in Health Spending, by Payer Growth Trends United States, 2019 Among payers, Medicare spending 20-YEAR Medicare GROW TH had the fastest growth rate (6.7%), 6.7% 5.8% driven by increases in both per Other Public Insurance enrollee spending and enrollment. Private health insurance spending 6.1% 7.7% growth was 3.7%, driven by a decline Out-of-Pocket in the net cost of health insurance.* 4.6% 4.9% Other Payers 4.4% 4.6% Medicaid (Federal) 4.1% 7.7% Private Health Insurance 3.7% *Net cost of health insurance declined in 2019 due to the 5.0% suspension of the health insurance tax. Medicaid (State) PAY E R D E F I N I T I O N S Other payers includes worksite health care, Indian Health 1.0% OVERALL: 4.6% 6.2% Services, workers' compensation, Maternal and Child Health, and vocational rehabilitation. Other public insurance includes Departments of Defense and Veterans Affairs health care and the Children's Health Insurance Program. Notes: Health spending refers to national health expenditures. Not shown: public health activities (3.5%) and investment (6.0%). Overall Medicaid, federal and state combined, grew Out-of-pocket includes consumer spending on copays, 2.9%. Twenty-year growth percentages are average annual (1999-2019). deductibles, and goods and care not covered by insurance; Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. it does not include premiums. CALIFORNIA HEALTH CARE FOUNDATION 36 Health Care Costs 101 Annual Growth, by Payer Growth Trends United States, 2009 to 2019 Changes in government policy and Private Insurance Out-of-Pocket Medicare large economic shifts affect health Medicaid (state) Medicaid (federal) 24% Federal Medicaid assistance to states increased ACA implementation resulted in expanded spending. Federal Medicaid spending 21.8% via recovery program (2009) Medicaid; millions gained coverage (2014) accelerated with ACA implementation 20% Enhanced Medicaid in 2014. In 2017 states began to pay assistance to states 16% expired a portion (5%) of Medicaid expansion (2011–12) costs, increasing state Medicaid 12% spending. 8% 6.7% 6.8% 4.6% 4% 4.1% 3.3% 3.7% 0% 1.0% -1.1% ACA subsidies and mandates -4% plus a stronger labor market led to a 9.3 million enrollment increase in private insurance -8% Rising unemployment led to decline of 6.5 million (2014–15) -9.9% people covered by employer-sponsored insurance (2009) -12% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 PAY E R D E F I N I T I O N Notes: Marketplace is individual health insurance coverage purchased on federal- and state-run health exchanges, such as healthcare.gov and Covered California. Not shown: other Out-of-pocket includes consumer spending on copays, public health insurance, other payers, public health activities, and investment. See page 39 for projected growth rates. deductibles, and goods and care not covered by insurance; Source: National Health Expenditure historical data (1960–2019), Centers for Medicare & Medicaid Services. it does not include premiums. CALIFORNIA HEALTH CARE FOUNDATION 37 Health Care Costs 101 Population and Personal Health Care Spending Distribution Age and Gender by Age Group, United States, 2014 In 2014, the elderly population, 65 100 - 2% 8% and over, made up nearly 15% of the 13% ■ 85+ ■ 65–84 US population and accounted for 35% ■ 45–64 of personal health care spending. In 80 27% ■ 19–44 26% ■ ≤18 contrast, children made up 24% of the population and accounted for 11% of 60 health care spending. 33% 40 35% 20 21% 24% 11% 0 Total Population Personal Health Care Spending Notes: Personal health care spending excludes net cost of health insurance, government administration, public health activities, and investment. See Appendix B for spending category details by age group and gender. Sources: "Age and Gender Tables (2002–14)," National Health Expenditure Data: Age and Gender, Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 38 Health Care Costs 101 Personal Health Care Spending per Capita Age and Gender by Age Group, United States, 2014 Per capita health spending varies by age. Personal health care spending among young, working-age adults $32,903 (19 to 44) totaled $4,856 per person, 30% more than children, but less than half as much as older working adults (45 to 64). Spending on those age 85 and over averaged $32,903 per person. $16,977 ALL AGES: $10,212 $8,054 $3,749 $4,856 ≤18 19–44 45–64 65–84 85+ Notes: Personal health care spending excludes net cost of health insurance, government administration, public health activities, and investment. Per capita spending for all people age 65 and older was $19,098. See Appendix B for spending category details by age group and gender. Sources: "Age and Gender Tables (2002–14)," National Health Expenditure Data: Age and Gender, Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 39 Health Care Costs 101 Personal Health Care Spending per Capita Age and Gender by Gender and Age Group, United States, 2014 ≤ 18 Women had higher personal health $3,591 care spending per capita than men. $3,900 Overall, per capita spending was $1,538 (or 21%) higher for females 19–44 $6,020 than males in 2014. This higher $3,711 spending is most pronounced in ■ Females ■ Males women of childbearing age (19 to 45–64 44), due to costs of maternity care, $10,466 and in older women (85 and older), $9,945 largely due to spending more on 65–84 nursing facility care. $16,992 $16,959 85+ $34,300 $30,216 ALL MALES: $7,273 ALL FEMALES: $8,811 Notes: Personal health care spending excludes net cost of health insurance, government administration, public health activities, and investment. Per capita spending for all people age 65 and older was $19,098 ($19,700 for females and $18,331 for males). See Appendix B for spending category details by age group and gender. Sources: "Age and Gender Tables (2002–14)," National Health Expenditure Data: Age and Gender, Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 40 Health Care Costs 101 Ten-Year Growth in Health Care Spending, by Age Group Age and Gender Per Capita and Total, United States, 2004 to 2014 Between 2004 and 2014, the elderly PER CAPITA had the slowest per capita growth for personal health care spending and children had the fastest. In contrast, 4.6% the elderly had the fastest growth in 4.3% 4.0% total personal health care spending 3.5% due to the growing elderly population. 2.4% 1.9% ≤18 19–44 45–64 65–84 85+ All Ages T O TA L 4.6% 4.6% 5.2% 4.9% 5.1% 4.9% Note: Personal health care spending excludes net cost of health insurance, government administration, public health activities, and investment. The percentages are annual average (2004-2014). Sources: "Age and Gender Tables (2002–14)," National Health Expenditure Data: Age and Gender, Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 41 Health Care Costs 101 Personal Health Care Spending per Capita Age and Gender by Spending Category and Age Group, United States, 2014 Spending on health services varied by ≤18 19–44 45–64 65–84 85+ ALL AGES age. Spending for the oldest category Personal Health Care $3,749 $4,856 $10,212 $16,977 $32,903 $8,054 (85+) was about nine times spending Hospital Care 1,546 1,986 4,016 6,162 9,254 3,076 for children ($32,903 vs. $3,749). A Physician and Clinical Services 921 1,251 2,549 3,657 4,372 1,873 third of all spending for those 85 and Dental Services 390 225 437 496 382 358 older was for nursing care facilities. Other Professional Services 120 171 325 578 722 261 Prescription drug spending for young Nursing Care Facilities 13 29 267 1,659 9,691 479 working-age adults ($509) was about Home Health Care 111 90 170 727 3,734 267 a third of that for older working-age Other Health Care 277 436 590 607 1,348 476 adults ($1,442). Prescription Drugs 283 509 1,442 2,176 2,018 937 Durable Medical Equipment 62 85 178 350 595 147 Other Nondurable Medical Products 27 74 237 566 788 181 Note: Personal health care spending excludes net cost of health insurance, government administration, public health activities, and investment. Sources: "Age and Gender Tables (2002–14)," National Health Expenditure Data: Age and Gender, Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 42 Health Care Costs 101 Impact of COVID-19 on Health Spending Preliminary information suggests that US health spending declined as much as 2% in 2020 during the COVID-19 pandemic. This would be the first reduction in annual overall health spending since tracking began in 1960. Preliminary data suggest reductions • While health care spending may have declined, its share of the economy likely increased in 2020 because in health care spending from delayed GDP declined by 3.5%, more than the expected reduction in health spending. and foregone care outweighed • Health care spending and use of services fell dramatically in spring 2020 as non-COVID-19 medical care was foregone or delayed. In April 2020 spending was down 20% compared to April 2019. spending increases for COVID-19 care • Use of telemedicine increased greatly but did not offset the decrease in in-person visits. and telemedicine in 2020. Reductions • Hospital elective procedures, including many surgeries, were cancelled in spring 2020 to free up capacity to in spending were greatest in April address COVID patients. • Physician practices were hard hit, some closed temporarily, and those that remained open saw a dramatic 2020, followed by a gradual recovery drop in patient visits, in part due to fears of infection. In April 2020, spending on physician and clinical to near prepandemic levels. services was 39% below February's prepandemic levels. • Nursing home care spending declined and home health care spending increased as patients sought to avoid congregate settings and infection risks. Compared to prepandemic levels, spending on nursing home care was down 9.8% as of October, and home health care was up 14.0%. • Spending on dental care was dramatically affected by the pandemic, falling by 65% between February and April as dental offices closed. As of October, dental spending was 17% below prepandemic levels. • Prescription drug spending was largely unaffected by the pandemic. Sources: Cynthia Cox, Krutika Amin, and Rabah Kamal, "How Have Health Spending and Utilization Changed During the Coronavirus Pandemic?," Peterson-KFF Health System Tracker, March 22, 2021; and George Miller et al., "COVID-19 Shocks the US Health Sector: A Review of Early Economic Impacts," Health Affairs Blog, December 16, 2020. CALIFORNIA HEALTH CARE FOUNDATION 43 Health Care Costs 101 Impact of COVID-19 on Health Spending (continued) After the pandemic is largely controlled, spending and utilization may differ from prepandemic patterns. In addition to the costs of vaccinations, • The COVID-19 vaccine rollout in 2021 will add to spending. • Missed screenings and preventive care may lead to more serious diagnoses, which may increase spending the shift in medical care delivery in 2021 and beyond. during the COVID-19 pandemic may • Use of telemedicine may remain elevated above prepandemic levels. yield some permanent changes in • Hospitalizations could be lower if alternatives to admissions, such as home-based care with remote monitoring, are pursued. health care delivery and spending. • Spending on nursing home care might not recover to prepandemic levels if the shift from nursing home care to home health care continues. Sources: Cynthia Cox, Krutika Amin, and Rabah Kamal, "How Have Health Spending and Utilization Changed During the Coronavirus Pandemic?," Peterson-KFF Health System Tracker, March 22, 2021; and George Miller et al., "COVID-19 Shocks the US Health Sector: A Review of Early Economic Impacts," Health Affairs Blog, December 16, 2020. CALIFORNIA HEALTH CARE FOUNDATION 44 Health Care Costs 101 Data Resources Economic Data National Health Expenditures • The Budget and Economic Outlook: 2021 to 2031. AGE AND GENDER Congressional Budget Office, February 11, 2021. ABOUT THIS SERIES • Data and Resources, Centers for Medicare & Medicaid Services • Consumer Price Index. US Bureau of Labor Statistics The California Health Care Almanac is an online • "Gross Domestic Product." US Bureau of Economic Analysis. HEALTH CARE SATELLITE ACCOUNT clearinghouse for data and analysis examining • "OECD Health Statistics 2020, Frequently Requested Data." Disease-Based Health Care Measures, US Bureau of the state's health care system. It focuses on issues Organisation for Economic Co-operation and Development. Economic Analysis of quality, affordability, insurance coverage and last updated September 3, 2020. • Introduction (PDF) the uninsured, and the financial health of the • Data and Resources Journal Publications Authored by CMS Staff system with the goal of supporting thoughtful • Martin, Anne B. et al. "National Health Care Spending in 2019: planning and effective decisionmaking. Learn HISTORICAL INFORMATION / OVERVIEW Steady Growth for the Fourth Consecutive Year." Health Affairs • Data by Service Category, Payer, and Sponsor more at www.chcf.org/almanac. 40, no. 1 (January 2021): 14–24. • Definitions, Sources, and Methods (PDF) COVID-19 Costs • Overview of National Health Expenditure Resources AU T H O R • Cox, Cynthia, Krutika Amin, and Rabah Kamal. "How Have • Quick Reference Definitions (PDF) Katherine Wilson, Wilson Analytics LLC Health Spending and Utilization Changed During the • Highlights (PDF) Coronavirus Pandemic?" Peterson-KFF Health System Tracker, March 22, 2021. • Miller, George et al. "COVID-19 Shocks the US Health Sector: A Review of Early Economic Impacts." Health Affairs Blog, December 16, 2020. F O R M O R E I N F O R M AT I O N California Health Care Foundation 1438 Webster Street, Suite 400 Oakland, CA 94612 510.238.1040 www.chcf.org CALIFORNIA HEALTH CARE FOUNDATION 45 Appendix A: Health Spending, by Category, United States, 1999 to 2019, Selected Years SPENDING (IN BILLIONS) DISTRIBUTION GROWTH/DECLINE * 1999 2009 2018 2019 1999 2009 2018 2019 1999–2019 2009–2019 2018 2019 National Health Expenditures $1,273.6 $2,492.8 $3,629.7 $3,795.4 100% 100% 100% 100% 5.6% 4.3% 4.7% 4.6% Health Consumption Expenditures $1,189.2 $2,345.6 $3,439.5 $3,593.7 93% 94% 95% 95% 5.7% 4.4% 4.7% 4.5% ▸ Personal Health Care 1,079.2 2,106.5 3,048.3 3,207.0 85% 85% 84% 84% 5.6% 4.3% 4.1% 5.2% ▸ Hospital Care 393.6 771.0 1,122.5 1,192.0 31% 31% 31% 31% 5.7% 4.5% 4.2% 6.2% ▸ Professional Services 361.4 668.1 979.4 1,025.9 28% 27% 27% 27% 5.4% 4.4% 4.5% 4.7% ▸ Physician and Clinical Services 269.5 497.7 738.2 772.1 21% 20% 20% 20% 5.4% 4.5% 4.0% 4.6% ▸ Dental Services 57.3 103.4 137.4 143.2 4% 4% 4% 4% 4.7% 3.3% 4.8% 4.2% ▸ Other Professional Services 34.6 67.0 103.9 110.6 3% 3% 3% 3% 6.0% 5.1% 7.5% 6.5% ▸ Nursing Care Facilities 80.6 135.2 167.2 172.7 6% 5% 5% 5% 3.9% 2.5% 2.3% 3.3% ▸ Home Health Services 32.8 67.0 105.4 113.5 3% 3% 3% 3% 6.4% 5.4% 5.5% 7.7% ▸ Other Health Care 59.2 122.0 191.3 193.6 5% 5% 5% 5% 6.1% 4.7% 3.0% 1.2% ▸ Retail Outlet Sales 151.6 343.1 482.4 509.3 12% 14% 13% 13% 6.2% 4.0% 3.9% 5.6% ▸ Prescription Drugs 105.3 254.3 349.8 369.7 8% 10% 10% 10% 6.5% 3.8% 3.8% 5.7% ▸ Durable Medical Equipment 22.1 41.2 54.8 57.6 2% 2% 2% 2% 4.9% 3.4% 4.7% 5.0% ▸ Other Nondurable Medical Products 24.1 47.6 77.7 82.1 2% 2% 2% 2% 6.3% 5.6% 3.8% 5.6% ▸ Administration 69.3 164.9 296.8 288.9 5% 7% 8% 8% 7.4% 5.8% 12.4% -2.7% ▸ Net Cost of Health Insurance 54.8 135.3 249.5 239.9 4% 5% 7% 6% 7.7% 5.9% 13.9% -3.8% ▸ Government Administration 14.5 29.6 47.3 49.0 1% 1% 1% 1% 6.3% 5.1% 5.1% 3.5% ▸ Public Health Activities 40.7 74.2 94.5 97.8 3% 3% 3% 3% 4.5% 2.8% 2.6% 3.5% Investment $84.4 $147.2 $190.2 $201.7 7% 6% 5% 5% 4.5% 3.2% 4.8% 6.0% ▸ Noncommercial Research 23.4 45.3 53.6 56.6 2% 2% 1% 1% 4.5% 2.2% 6.6% 5.5% ▸ Structures and Equipment 61.0 101.9 136.6 145.1 5% 4% 4% 4% 4.4% 3.6% 4.1% 6.3% *Growth rates for the 1999–2019 and 2009–2019 periods are average annual; 2018 and 2019 are the growth/decline over previous year. Notes: Health spending refers to national health expenditures. Figures may not sum due to rounding. Source: National Health Expenditure Data: Historical, Centers for Medicare & Medicaid Services (CMS). CALIFORNIA HEALTH CARE FOUNDATION 46 Appendix B: Personal Health Care Spending, by Gender, Age, and Spending Category, 2014 FEMALES MALES TOTAL 0–18 19–44 45–64 65–84 85+ ALL 0–18 19–44 45–64 65–84 85+ ALL 0–18 19–44 45–64 65–84 85+ ALL PER CAPITA $3,591 $6,020 $10,466 $16,992 $34,300 $8,811 $3,900 $3,711 $9,945 $16,959 $30,216 $7,273 $3,749 $4,856 $10,212 $16,977 $32,903 $8,054 Hospital Care 1,486 2,588 3,884 5,763 9,025 3,261 1,603 1,394 4,155 6,641 9,694 2,885 1,546 1,986 4,016 6,162 9,254 3,076 Physician and Clinical Services 878 1,644 2,827 3,582 3,998 2,097 962 863 2,258 3,747 5,093 1,642 921 1,251 2,549 3,657 4,372 1,873 Dental Services 432 268 470 499 363 393 350 183 403 493 417 321 390 225 437 496 382 358 Other Professional Services 115 214 382 627 725 304 124 129 265 519 716 217 120 171 325 578 722 261 Nursing Care Facilities 11 27 243 1,859 11,191 607 15 31 293 1,419 6,806 347 13 29 267 1,659 9,691 479 Home Health Care 103 103 184 821 4,117 322 119 76 155 614 2,996 209 111 90 170 727 3,734 267 Other Health Care 238 390 541 680 1,405 458 314 481 642 520 1,238 495 277 436 590 607 1,348 476 Prescription Drugs 240 600 1,484 2,212 2,050 1,003 325 419 1,397 2,132 1,955 869 283 509 1,442 2,176 2,018 937 Durable Medical Equipment 64 99 205 347 559 164 59 71 150 352 663 129 62 85 178 350 595 147 Other Nondurable 24 87 247 603 867 203 29 62 227 521 637 158 27 74 237 566 788 181 Medical Products 10-YEAR GROWTH 4.5% 4.1% 3.2% 2.4% 1.8% 3.8% 4.6% 4.5% 3.9% 2.4% 2.2% 4.4% 4.6% 4.3% 3.5% 2.4% 1.9% 4.0% Hospital Care 5.3% 5.6% 4.8% 2.0% 1.6% 4.6% 5.3% 6.2% 5.0% 1.8% 1.8% 5.0% 5.3% 5.8% 4.9% 1.9% 1.7% 4.8% Physician and Clinical Services 4.1% 3.5% 2.3% 2.4% 4.4% 3.3% 4.2% 3.8% 2.7% 2.0% 4.0% 3.7% 4.2% 3.6% 2.5% 2.2% 4.4% 3.5% Dental Services 3.1% 0.9% 1.6% 4.3% 5.1% 2.4% 2.5% 0.8% 2.6% 3.4% 4.4% 2.5% 2.8% 0.9% 2.0% 3.9% 5.0% 2.5% Other Professional Services 5.6% 3.4% 2.4% 4.2% 4.1% 4.0% 5.4% 3.4% 3.6% 4.5% 4.3% 4.8% 5.5% 3.4% 2.9% 4.3% 4.1% 4.3% Nursing Care Facilities 4.6% 2.1% 4.1% 1.3% -0.2% 2.3% 5.2% 1.0% 4.6% 2.2% 0.4% 4.2% 5.0% 1.5% 4.4% 1.6% -0.2% 2.9% Home Health Care 8.2% 7.5% 3.1% 2.7% 5.5% 5.5% 8.0% 6.4% 4.0% 3.4% 4.8% 6.1% 8.1% 7.2% 3.5% 2.9% 5.2% 5.7% Other Health Care 4.1% 3.7% 4.3% 5.1% 5.6% 4.6% 5.1% 4.1% 4.3% 3.9% 1.8% 4.5% 4.6% 3.9% 4.3% 4.6% 4.4% 4.6% Prescription Drugs 3.1% 2.4% 1.8% 3.3% 1.4% 3.0% 3.5% 3.5% 3.3% 4.4% 2.7% 4.4% 3.3% 2.9% 2.4% 3.8% 1.8% 3.6% Durable Medical Equipment 5.6% 3.2% 2.7% 1.6% 0.4% 3.1% 6.3% 4.2% 2.6% 2.4% 1.8% 4.1% 6.2% 3.5% 2.7% 2.0% 1.0% 3.5% Other Nondurable 2.9% 2.8% 2.5% 1.9% 1.8% 3.0% 2.3% 3.3% 3.1% 2.2% 2.1% 3.8% 3.0% 2.8% 2.7% 2.0% 1.8% 3.4% Medical Products Note: Personal health care spending excludes net cost of health insurance, government administration, public health activities, and investment. Sources: "Age and Gender Tables (2002–14)," National Health Expenditure Data: Age and Gender, Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 47 Appendix B: Personal Health Care Spending, by Gender, Age, and Spending Category, 2014, continued FEMALES MALES TOTAL 0–18 19–44 45–64 65–84 85+ ALL 0–18 19–44 45–64 65–84 85+ ALL 0–18 19–44 45–64 65–84 85+ ALL AGGREGATE SPENDING (IN BILLIONS) $136.4 $331.2 $446.6 $370.3 $138.7 $1,423.2 $154.8 $207.5 $404.0 $308.6 $63.5 $1,138.3 $291.2 $538.7 $850.6 $678.9 $202.2 $2,561.5 Hospital Care 56.44 142.36 165.74 125.58 36.49 526.61 63.60 77.98 168.77 120.85 20.37 451.56 120.04 220.33 334.51 246.44 56.86 978.17 Physician and Clinical Services 33.37 90.46 120.61 78.07 16.16 338.67 38.16 48.26 91.73 68.19 10.70 257.05 71.53 138.73 212.34 146.26 26.86 595.72 Dental Services 16.40 14.73 20.04 10.87 1.47 63.51 13.87 10.24 16.35 8.96 0.88 50.30 30.27 24.97 36.39 19.84 2.35 113.81 Other Professional Services 4.39 11.78 16.31 13.65 2.93 49.06 4.93 7.24 10.78 9.45 1.50 33.90 9.32 19.02 27.08 23.10 4.44 82.96 Nursing Care Facilities 0.43 1.50 10.35 40.50 45.24 98.03 0.61 1.74 11.89 25.82 14.30 54.37 1.04 3.25 22.24 66.33 59.54 152.40 Home Health Care 3.92 5.68 7.87 17.90 16.65 52.01 4.73 4.25 6.30 11.17 6.30 32.74 8.64 9.93 14.17 29.07 22.94 84.76 Prescription Drugs 9.10 32.99 63.33 48.21 8.29 161.92 12.91 23.46 56.75 38.81 4.11 136.03 22.01 56.45 120.08 87.02 12.40 297.95 Durable Medical Equipment 2.43 5.45 8.74 7.57 2.26 26.45 2.35 3.97 6.10 6.41 1.39 20.23 4.78 9.42 14.84 13.98 3.66 46.68 Other Health Residential and 9.03 21.44 23.08 14.81 5.68 74.05 12.45 26.90 26.08 9.46 2.60 77.49 21.48 48.34 49.17 24.27 8.28 151.54 Personal Care Other Nondurable Medical 0.92 4.77 10.53 13.13 3.51 32.85 1.16 3.47 9.22 9.49 1.34 24.67 2.07 8.24 19.75 22.62 4.84 57.52 Products 10-YEAR GROWTH 4.6% 4.5% 4.9% 4.6% 4.4% 4.6% 4.6% 4.7% 5.5% 5.3% 6.7% 5.2% 4.6% 4.6% 5.2% 4.9% 5.1% 4.9% Hospital Care 5.4% 6.0% 6.5% 4.1% 4.3% 5.5% 5.3% 6.5% 6.6% 4.7% 6.3% 5.8% 5.3% 6.1% 6.6% 4.4% 4.9% 5.6% Physician and Clinical Services 4.1% 3.8% 4.0% 4.6% 7.1% 4.2% 4.2% 4.1% 4.3% 4.8% 8.6% 4.5% 4.2% 3.9% 4.1% 4.7% 7.7% 4.3% Dental Services 3.1% 1.2% 3.3% 6.5% 7.8% 3.3% 2.5% 1.1% 4.2% 6.3% 9.0% 3.4% 2.8% 1.2% 3.7% 6.4% 8.3% 3.3% Other Professional Services 5.6% 3.8% 4.1% 6.3% 6.8% 4.8% 5.4% 3.7% 5.2% 7.5% 8.9% 5.6% 5.5% 3.7% 4.5% 6.8% 7.4% 5.1% Nursing Care Facilities 5.6% 2.6% 5.8% 3.4% 2.4% 3.1% 5.1% 1.2% 6.3% 5.0% 4.9% 5.1% 5.3% 1.8% 6.0% 4.0% 2.9% 3.8% Home Health Care 8.3% 7.8% 4.9% 4.9% 8.3% 6.4% 8.1% 6.7% 5.6% 6.3% 9.5% 7.0% 8.2% 7.3% 5.2% 5.4% 8.6% 6.6% Prescription Drugs 3.1% 2.7% 3.4% 5.5% 4.1% 3.8% 3.5% 3.8% 4.9% 7.3% 7.2% 5.2% 3.3% 3.1% 4.1% 6.3% 5.0% 4.4% Durable Medical Equipment 5.5% 3.5% 4.4% 3.7% 3.0% 4.0% 6.5% 4.4% 4.2% 5.3% 6.4% 5.0% 6.0% 3.9% 4.3% 4.4% 4.1% 4.4% Other Health Care 4.1% 4.1% 6.0% 7.3% 8.3% 5.5% 5.1% 4.4% 5.9% 6.8% 6.3% 5.3% 4.7% 4.2% 5.9% 7.1% 7.7% 5.4% Other Nondurable Medical 3.1% 3.0% 4.2% 4.0% 4.4% 3.9% 2.5% 3.5% 4.6% 5.0% 6.6% 4.6% 2.7% 3.2% 4.4% 4.4% 5.0% 4.2% Products Note: Personal health care spending excludes net cost of health insurance, government administration, public health activities, and investment. Sources: "Age and Gender Tables (2002–14)," National Health Expenditure Data: Age and Gender, Centers for Medicare & Medicaid Services. CALIFORNIA HEALTH CARE FOUNDATION 48 Appendix C: Health Spending, by Medical Condition, United States, 2016 to 2018 SPENDING DISTRIBUTION GROWTH (IN BILLIONS) 2016 2017 2018 2016 2017 2018 2017 2018 All Diseases/Conditions $2,258.3 $2,253.0 $2,460.0 100% 100% 100% 4.3% 4.5% Routine Care, Signs and Symptoms 320.0 338.5 349.8 14% 14% 14% 5.8% 3.3% Circulatory System Diseases 253.5 261.7 273.7 11% 11% 11% 3.3% 4.6% Musculoskeletal System Diseases 229.7 237.3 245.2 10% 10% 10% 3.3% 3.3% Nervous System Diseases 178.8 188.3 197.9 8% 8% 8% 5.3% 5.1% Respiratory System Diseases 172.7 181.5 186.4 8% 8% 8% 5.1% 2.7% Endocrine System Diseases 154.0 161.7 171.2 7% 7% 7% 5.0% 5.9% Neoplasms 138.1 146.0 156.6 6% 6% 6% 5.7% 7.2% Injury and Poisoning 136.6 139.9 143.5 6% 6% 6% 2.4% 2.5% Infectious Diseases 121.5 126.8 135.8 5% 5% 6% 4.4% 7.1% Digestive System Diseases 122.7 126.9 133.0 5% 5% 5% 3.5% 4.8% Genitourinary System Diseases 118.9 121.6 126.7 5% 5% 5% 2.2% 4.2% Mental Illness 104.5 114.8 122.3 5% 5% 5% 9.8% 6.5% Other 94.6 95.5 98.4 4% 4% 4% 1.0% 3.1% Skin Diseases 59.9 61.9 64.5 3% 3% 3% 3.3% 4.3% Pregnancy 52.8 52.7 54.9 2% 2% 2% -0.2% 4.3% Notes: Spending on medical condition (shown) accounted for 84% of the $2.9 trillion in 2018 health care spending under the health care satellite accounts. Spending on medical services by provider, such as dental services and nursing homes, and medical products, appliances, and equipment, are not shown. Growth is from the previous year. Source: Blended Account, 2000–2018, Bureau of Economic Analysis, March 16, 2021. CALIFORNIA HEALTH CARE FOUNDATION 49