Healthcare Spending Increases So Far in 2015

Healthcare spending in the first quarter of 2015 experienced its fastest growth in more than five years, and hospital spending led the way, according to a new Census Bureau report.


Spending in the overall healthcare sector increased 7.2 percent compared to the first quarter last year; spending on hospital care increased 9.2 percent during that time period. In comparison, spending in the overall economy increased 3 percent in the same time period. (“Hospitals Lead Increase in Healthcare Spending,” HFMA Weekly News, June 19, 2015)


Kaiser Family Foundation tracks healthcare spending and reported that growth exceeded earlier estimates and has been increasing since the first quarter of 2014.


Some of the highlights from the Census Bureau and Kaiser Family Foundation reports include:


  • Spending at general medical and surgical hospitals increased 9.3 percent, 7.9 percent at psychiatric and substance abuse hospitals and 7.6 percent at other types of specialty hospitals.
  • Spending on ambulatory healthcare services grew 5.9 percent—9.4 percent for practitioner offices; 9.1 percent for laboratory services; 8.7 percent for outpatient centers.


Some analysts attribute the spending increase to a greater use of services; for example, over the same time period the number of hospital days increased by 3.5 percent and discharges increased by 4 percent. Others have said “pent-up demand for care by newly covered consumers” under the Affordable Care Act is driving the spending increase. (“Hospitals Lead Increase in Healthcare Spending,” HFMA Weekly News, June 19, 2015)


While some analysts have predicted that the period of historically low spending growth rates may be over, others noted that the first quarter growth rate will represent a peak, and that spending growth will moderate for the remainder of 2015.


Although spending increased significantly, hospital prices increased only 0.5 percent and physician and clinical services by only 1.1 percent. For the healthcare sector overall, prices increased only 1.2 percent. However, prescription drug prices increased by 5.6 percent, a near 13-year high.


The 9.2 percent revenue increase for hospitals provided them $261 billion in the first quarter of this year, contributing to a “hospital job boom . . . an average monthly increase of nearly 13,000 new jobs per month so far in 2015” after sluggish growth in 2013 and 2014. The healthcare sector has added more than 400,000 jobs in the last 12 months. (“Hospitals Lead Increase in Healthcare Spending,” HFMA Weekly News, June 19, 2015)



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