Dive Brief:
- The CMS has released data showing overall healthcare spending accelerated in 2014 as it grew by 5.3%, compared to the previous five years, which showed average growth of 3.7%.
- The agency stresses growth was still below the rates seen prior to the passage of the Affordable Care Act and consumer out-of-pocket spending only increased 1.3% in 2014 compared to 2.4% in 2013.
- The report concludes the spending acceleration in 2014 can primarily be attributed to the new health insurance coverage of millions of people under the ACA, as well as soaring prescription drug costs, particularly for new specialty drugs such as those for hepatitis C.
Dive Insight:
The 2014 data drew debate about how the ACA or other factors drove the accelerated spending, given that the period from 2009 to 2013 saw the lowest rates of growth in U.S. healthcare spending in half a century, the Los Angeles Times noted.
While the ACA dates to 2010, the year 2014 was pivotal because that was when its major provisions took effect. At the same time, some experts attribute the slow growth preceding the ACA to healthcare cutbacks resulting from the Great Recession.
Administration officials project the increases attributed to coverage expansion will drop off over the next years.
“Today’s report reminds us that we must remain vigilant in focusing on delivering better healthcare outcomes, which leads to smarter spending, particularly as costs increase in key care areas, like prescription drugs costs,” CMS Acting Administrator Andy Slavitt said in a prepared statement.