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New NHE data: Medicine prices declined, and hospitals were biggest driver of health care spending in 2018

Holly Campbell   |     December 6, 2019   |   SHARE THIS

According to new data from the National Health Expenditures (NHE), retail medicine prices declined by 1% and retail medicine spending grew just 2.5% in 2018. To put that in context, hospital spending, which continued to account for one-third of all health care spending, grew by 4.5%, and physicians and clinical services grew by 4.1%. This data, published in Health Affairs, underscores how policies that single out prescription medicine won’t fix soaring health care costs or lower out-of-pocket costs for Americans. 

Other key data points include:

  • Total patient out-of-pocket spending grew 2.8% in 2018 — faster than 2.2% in 2017.

  • Overall health care spending growth (4.6%) was driven by a 13.2% increase in the net cost of health insurance.

  • Total spending for physician and clinical services grew 4.1%, to $725.6 billion.

  • Total spending for hospitals grew 4.5%, to $1.19 trillion in 2018.

  • Hospital spending was over three and a half times more than retail medicine spending in 2018, but patients paid over $12 billion more in out-of-pocket costs for their retail medicines.

patients pay more outofpocket at pharmacey counter

Learn more at www.LetsTalkAboutCost.org.

Holly Campbell

Holly Campbell Holly Campbell is former deputy vice president of public affairs at PhRMA focusing on the cost and value of medicines. Prior to joining PhRMA, Holly worked for large and small public relations firms where she provided strategic communications counsel, media relations and partnership expertise to health care and pharmaceutical clients. In her free time, she enjoys taking barre classes, trying new restaurants and spending time with Boss and Poppy, her rescue pups.

Topics: Out-of-Pocket Costs, Hospitals, Let's Talk About Cost

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