MedPAC updates healthcare spending

Wednesday, July 24, 2019

WASHINGTON – Medicare was the single largest purchaser of personal health care in 2017, according to a new report from the Medicare Payment Advisory Committee.

Of the $3 trillion spent on personal healthcare that year, Medicare accounted for 22% or $660 billion, MedPAC says.

Other findings from the report:

·      Medicare spending totaled $737 billion for benefit expenses in 2018. Managed care was the largest category (32%), followed by inpatient hospital services (20%) part D prescription drugs (13%) and services reimbursed under the physician fee schedule (10%).

·      Spending for inpatient hospital services fell from 26% to 20% between 2009 and 2018. Spending on Medicare beneficiaries enrolled in managed care plans grew from 23% to 32% over the same period; and enrollment in Medicare managed care increased 82% between 2010 and 2018.

·      Medicare spending per beneficiary has fallen from average annual rates of 10% in the 1980s to 2% between 2010 and 2018. Despite the slowdown, growth in total spending is projected by the Trustees and the Congressional Budget Office to average 8% annually, compared to about 4% projected by the GDP.