If I were to ask you what affects healthcare spending, I’d likely get about as many answers as we have readers. Some might say advancing technology, a workforce shortage, prescription drug prices, an aging population…the factors are endless.
But it’s the job of the Centers for Medicare & Medicaid Services (CMS) to officially project future spending on health, and last week, the agency’s Office of the Actuary published their official report on national health expenditure projections through 2032. Let’s take a look at some of the factors CMS saw when they asked themselves this very question.
The highlight you may have seen from this report is this: national health spending is projected to outpace the rest of the country’s overall economy in 2023, with a 7.5-percent growth in expenditures. This was due to a sharp increase in utilization of healthcare following the slowdown during the COVID-19 pandemic. In fact, hospital spending was reported to have jumped from a 2-percent increase in 2022 to a 10-percent increase in 2023. Spending on physician and clinical services saw a similar, though slightly less pronounced, jump during the year as well. Medicaid enrollment was high from the lack of disenrollments over the previous years, and enrollment in private health insurance grew because of subsidies and the temporary special enrollment period. The pandemic might have been in our rearview mirrors, but its impact was still palpable in the industry.
This year, things are slowing just a bit. Growth rates for health expenditures will likely be impacted by declining Medicaid spending from state eligibility redeterminations, as well as decreased utilization of healthcare services overall as we get further from the pandemic and habits return closer to normal.
Growth in personal healthcare prices, however, is expected to outpace economywide price growth. Frequent readers may remember me reporting on how healthcare price increases can lag behind other economic markers due to prices being set in advance; well, the sand in the hourglass has run out! Inflation is hitting the industry hard, and the data shows continued growth here.
But the report also highlights expected trends in healthcare expenditures throughout the next decade. So, what’s in store for the future?
First up, Medicare is expected to have the highest spending growth rate of all major payers, as baby boomers continue to enroll through the end of 2029. Private health insurance spending should even out to longer-term averages, but that too is partially due to baby boomers aging into Medicare coverage instead.
In fact, CMS expects an inverse relationship between private health insurance spending growth and Medicare spending growth: as private insurance spending falls from fewer Marketplace enrollments, Medicare spending growth increases due to federal regulations and an increase in enrollments.
Second, hospital spending growth is expected to slow to an average of about 5 percent: not the highest we’ve seen, but not the lowest either. This is about on par with what CMS projects private health insurance’s and Medicaid’s spending growth rates to be.
Third and finally, by the end of the next 10 years, CMS expects health expenditures to have risen to $7.7 trillion – and government healthcare sponsors will account for half of that number. To put that into perspective, the U.S. currently spends just short of one trillion on defense annually.
The report leaves us with the projection that healthcare expenditures will eventually account for one-fifth of the U.S. economy. Now, several sources point out that CMS has been wrong before and could be wrong again; they certainly couldn’t have accounted for the pandemic in previous projections, for example.
I guess you’ll just have to meet me back here in 2032 to find out!
We have been talking a lot lately about the malfeasance of Medicare Advantage (MA) plans, and deservedly so. But malfeasance can be a two-way street.
While President-elect Trump’s pick for U.S. Department of Health and Human Services (HHS) Secretary, Robert F. Kennedy, Jr., put the agency in even international newspapers
Please log in to your account to comment on this article.
Join Beth Wolf, MD, CPC, CCDS, for an in-depth webcast on the FY2025 spinal fusion MS-DRG updates. Discover key changes in DRG classification, understand impacts on documentation and CMI, and learn strategies to ensure compliance.
Join Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, as she presents effective strategies to strengthen collaboration between CDI, coding, and quality departments in acute care hospitals. Angela will also share guidance on implementing cross-departmental meetings, using shared KPIs, and engaging leadership to foster a culture of collaboration. Attendees will gain actionable tools to optimize documentation accuracy, elevate quality metrics, and drive a unified approach to healthcare goals, ultimately enhancing both patient outcomes and organizational performance.
Optimize your outpatient clinical documentation and gain comprehensive knowledge from foundational practices to advanced technologies, ensuring improved patient care and organizational and financial success. This webcast bundle provides a holistic approach to outpatient CDI, empowering you to implement best practices from the ground up and leverage advanced strategies for superior results. You will gain actionable insights to improve documentation quality, patient care, compliance, and financial outcomes.
Enhancing outpatient clinical documentation is crucial for maintaining accuracy, compliance, and proper reimbursement in today’s complex healthcare environment. This webcast, presented by industry expert Angela Comfort, DBA, RHIA, CDIP, CCS, CCS-P, will provide you with actionable strategies to tackle complex challenges in outpatient documentation. You’ll learn how to craft detailed clinical narratives, utilize advanced EHR features, and implement accurate risk adjustment and HCC coding. The session also covers essential regulatory updates to keep your documentation practices compliant. Join us to gain the tools you need to improve documentation quality, support better patient care, and ensure financial integrity.
Dr. Ronald Hirsch provides critical details on the new Medicare Appeal Process for Status Changes for patients whose status changes during their hospital stay. He also delves into other scenarios of hospital patients receiving custodial care or medically unnecessary services where patient notifications may be needed along with the processes necessary to ensure compliance with state and federal guidance.
Healthcare organizations face complex regulatory requirements under the No Surprises Act and Price Transparency rules. These policies mandate extensive fee disclosures across settings, and confusion is widespread—many hospitals remain unaware they must post every contracted rate. Non-compliance could lead to costly penalties, financial loss, and legal risks. Join David M. Glaser Esq. as he shows you how to navigate these regulations effectively.
Protect your facility from unwanted audits! Join Becky Jacobsen, BSN, RN, MBS, CCS-P, CPC, CPEDC, CBCS, CEMC, and take a deep dive into both the CMS and AMA guidelines for reporting post operative pain blocks. You’ll learn how to determine if the nerve block is separately codable with real life examples for better understanding. Becky will also cover how to evaluate whether documentation supports medical necessity, offer recommendations for stronger documentation practices, and provide guidance on educating providers about documentation requirements. She’ll include a discussion of appropriate modifier and diagnosis coding assignment so that you can be confident that your billing of post operative pain blocks is fully supported and compliant.
During this RACmonitor webcast Dr. Ronald Hirsch spotlights the areas of the OIG’s Work Plan and the findings of their most recent audits that impact utilization review, case management, and audit staff. He also provides his common-sense interpretation of the prevailing regulations related to those target issues. You’ll walk away better equipped with strategies to put in place immediately to reduce your risk of paybacks, increased scrutiny, and criminal penalties.
Copyright © 2024 RACmonitor. Powered by MedLearn Media.
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
