According to a report, U.S. healthcare spending grew by 7.5% to $4.9 trillion in 2023. The increase was fueled by higher enrollment in private health plans and expanded use of medical services, driven by legislative changes and post-pandemic rebounds in care utilization.
Healthcare spending accounted for 17.6% of the U.S. economy, outpacing GDP growth of 2.9%. Spending on retail prescription drugs saw the most significant rise, jumping 11.4% to $449.7 billion.
The report attributed this to increased use of medications for obesity and diabetes.
The rapid growth in spending for drugs used to treat diabetes and obesity contributed to faster overall growth in retail prescription drug expenditures and private health insurance and Medicare spending growth.
Hospital care spending rose 10.4% to $1.5 trillion in 2023, marking the fastest growth since 1990. Hospital discharges increased by 1.6%, with Medicare beneficiaries driving higher outpatient service utilization.
Spending on physician and clinical services also climbed by 7.4% to $978 billion, with private insurance and Medicare patients contributing to this rise.
Enrollment in private health insurance grew by 1.6%, adding 3.3 million Americans.
Private insurance spending surged by 11.5%, reaching $1.5 trillion and accounting for 30% of national healthcare expenditures.
Medicare spending grew 8.1% to $1 trillion, representing 21% of total healthcare spending. Medicaid spending, however, grew more slowly at 7.9%, reflecting the end of the COVID-19 public health emergency.
The report also revealed that 92.5% of Americans had health insurance in 2023, up from 92.0% in 2022, underscoring the broader coverage expansion in recent years.
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