Proportion of healthcare spending by public sector is rising

The public sector paid for 45 percent of total spending on healthcare in 2010, up significantly since 1987, where it was approximately one third, according to an article by the Commonwealth Fund.

The article examines a study by the National Institute for Health Care Management Foundation.  Key findings include:

  • Between 1987 and 2010, Medicare spending nearly tripled from 3.4 percent to 9.8 percent and spending for Medicaid doubled from 5.4 percent to 10.7 percent, while spending for healthcare by private business and households fell.
  • Hospital care accounted for the largest portion of total spending, rising 21% between 2006-2010.
  • Overall total spending on healthcare in the U.S. made up 18 percent of the gross domestic product and is projected to reach nearly 20 percent of GDP by 2020.

The report notes that although spending growth has slowed in the last three years, health spending continues to exceed economic growth.

(Source: The Commonwealth Fund, http://www.commonwealthfund.org, June 1, 2012)