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Did healthcare spending increase 9.7% or 1.9% in 2020? Probably neither.

CMS has produced its estimate of healthcare spending in 2020:

As with so many aspects of American life, the COVID-19 pandemic had a dramatic impact on the nation’s health sector in 2020, driving a 9.7% growth in total national healthcare spending, bringing spending to $4.1 trillion.

....However, when spending for federal public health and other federal programs (which includes COVID-19 supplemental funding) is removed, NHE growth was only 1.9%, a slower rate of growth from the 4.3% increase in 2019, largely due to reduced use of medical care goods and services because of the pandemic.

Obviously the 9.7% figure is meaningless since it includes billions of dollars in one-time COVID expenditures. However, the 1.9% figure is probably also meaningless since lots of routine healthcare was put off due to COVID staffing issues.

In other words, 2020 is a black hole and always will be. That probably goes for 2021 too. We have a period of a year or two (or three) where we really have no idea how much normal healthcare spending has increased. This is a disaster for those of us who like to make political points based on these numbers, but I suppose we'll all survive.

13 thoughts on “Did healthcare spending increase 9.7% or 1.9% in 2020? Probably neither.

  1. sturestahle

    I am actually not trying to be sarcastic or mean or jingoistic … but still!
    Why are you accepting your situation?
    Why aren’t the sane majority out in the streets demanding their rights.
    None of your political “parties” has any intentions to handle your situation , at least not if we are talking about how it’s handled elsewhere.
    Countries that sure don’t have your resources are heavenly places compared to the US of A
    … and nothing is happening, it’s not even possible to talk about it
    A comment from a dumbfounded Swede

    1. sturestahle

      When reading my comment afterwards I do notice I didn’t expressly write “healthcare” but that was the topic
      … but I could of course use this comment on other topics as well

  2. cmayo

    This goes for a lot of data, really. Economic. Housing. Homelessness. And on and on.

    It isn't always that we have no data or bad data, it's that there's a clear blip and an obvious reason why, but also impossible to project with the same kind of certainty as a just a few years ago. The error bars are wider now.

  3. sturestahle

    I was in a bad mood the other week.
    My right hip is hurting, a lot , and I need a hip replacement.
    I wasn’t in a bad mood due to the hip, that’s what one can expect at my age. The reason was a long bus trip, in my opinion an unnecessarily one.
    In short, Sweden is , when it comes to healthcare, divided into 21 areas. Each one is administrated separately and we are electing the ones to handle it (but the overall rules is set by the parliament). My area is one of the smaller ones, just 246k inhabitants , 100k of them are living in my city and the rest is just small towns and rural areas. We are having three major hospitals and that’s one to many. Healthcare is getting more and more specialized and small hospitals are to expensive to run today.
    … anyway, I was sitting on a bus in order to meet an orthopedic surgeon for an examination. He was also traveling from my city to this hospital that should have been closed… but the politicians are afraid of the protest from the (few) locals in this small town so they are pouring money into this hospital, money that could be used better elsewhere
    Wait!!!
    I am whining over having to travel 75 miles to get a free examination and I am also whining over having to travel the same distance for free surgery
    (I will of course also get free physiotherapy afterwards and I could have stayed home from work being paid 80% of my salary during the rehabilitation if hadn’t been retired)
    And I am whining!
    A hip replacement in the United States of America is something like
    $40 000 if you aren’t insured and it’s insanely expensive even if you are..
    Why aren’t you occupying the Capitol?

    1. MontyTheClipArtMongoose

      The mask comes off.

      I haven't seen a Scandinavian exposed so c look early as a Russian steppe settler since the Kievan Rus.

  4. jmac

    Couldn't this question be answered by simply looking at the rates charged by health care providers? AND, isn't that really the thing we need to know... how much is the health care industry profiting off this pandemic.

  5. DFPaul

    Oh you can bet McConnell is gonna tell us that with health care costs going up 10% per year now is not the time to raise the onerous tax burden on America’s big donors… sorry, I mean America’s job creators

    1. Spadesofgrey

      Won't work. Much like Republicans will have trouble explaining unemployment under 3.5%. The bigger challenge is single issues where the Democratic party is heavily split.

  6. golack

    The question is, will this mean more rural health care providers stay solvent or close up shop? Will nurses be treated better or become contract employees without benefits? How will insurance companies use this as an excuse to increase rates and juice profits? Inquiring minds....

    1. jte21

      It will probably mean more industry consolidation as hospital companies and medical practices try to grow to maintain profit margins, which is getting harder during Covid and the national healthcare labor shortage.

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