US healthcare spending to grow 10% annually through 2028, report says (2024)

FAQs

US healthcare spending to grow 10% annually through 2028, report says? ›

U.S. consumer out-of-pocket healthcare expenditures are expected to grow 10 percent annually through 2028, according to a report from market research firm Kalorama Information. By the end of 2023, out-of-pocket healthcare expenditures will reach $519 billion, a jump of 9 percent from 2022.

U.S. health care spending grew 4.1% to reach $4.5 trillion in 2022, faster than the increase of 3.2% in 2021, but much slower than the rate of 10.6% in 2020.

U.S. national health expenditure forecast 2022-2031

For 2031, the total health expenditure of the United States is forecasted to reach some 7.1 trillion U.S. dollars.

There are many possible reasons for that increase in healthcare prices: The introduction of new, innovative healthcare technology can lead to better, more expensive procedures and products. The complexity of the U.S. healthcare system can lead to administrative waste in the insurance and provider payment systems.

U.S. health care spending grew 4.1 percent in 2022, reaching $4.5 trillion or $13,493 per person. As a share of the nation's Gross Domestic Product, health spending accounted for 17.3 percent.

U.S. consumer out-of-pocket healthcare expenditures are expected to grow 10 percent annually through 2028, according to a report from market research firm Kalorama Information.

Source: State Health Expenditure Accounts by State of Residence, 1991-2020, Centers for Medicare & Medicaid Services, accessed November 20, 2022. Between 2010 and 2020, California's health spending per capita grew on average 4.7% per year, exceeding the US rate of 3.8%.

By the year 2030, as America's baby boomers enter their seventies and eighties, health spending will top $16 trillion, or 32 percent of GDP.

Health spending is projected to return to an annual growth rate of 4.8% between 2022 and 2031, as the consumption of health care services (utilization) rebounds and health sector prices grow due to inflation.

Projected NHE, 2022-2031:

Over 2022-2031 average growth in NHE (5.4 percent) is projected to outpace that of average GDP growth (4.6 percent) resulting in an increase in the health spending share of GDP from 18.3 percent in 2021 to 19.6 percent in 2031.

What is the biggest driver of healthcare costs? ›

The Best Healthcare Systems in the World in 2024

What country has the best healthcare, according to this assessment? Singapore comes in at No. 1! Other countries with the best healthcare are listed below.

The United States: the world's highest medical expenses

The United States has the most expensive healthcare system of any country.

This statistic depicts the countries with the lowest share of government health expenditure in 2020. In that year, South Sudan had the lowest health expenditure worldwide, measured by the percentage of total governmental expenditures. Only 2.1 percent of all expenditures went to health-related issues.

Cutler explored three driving forces behind high health care costs—administrative expenses, corporate greed and price gouging, and higher utilization of costly medical technology—and possible solutions to them.

The United States spends twice as much per person on health as the average of peer nations. A number of studies have concluded that high prices are a major driver of this “excess” spending.

According to a May 2021 Bureau of Labor Statistics report, health care occupations will rise by 15% between 2019 and 2029. The report revealed that health care jobs are growing at a faster rate than any other industry.

The U.S. Chamber of Commerce anticipates an increased demand for healthcare and pharmaceutical workers, expecting over 3.3 million new jobs in the next 7 years. The BLS expects the sector will create about 45% of all projected job gains from 2022 to 2032.

U.S. health expenditure as percent of GDP 1960-2022

In 2022, U.S. national health expenditure as a share of its gross domestic product (GDP) reached 17.3 percent, this was a decrease on the previous year. The United States has the highest health spending based on GDP share among developed countries.