How Much Did Americans Spend on Health Care in 2013?
Understand how much Americans spent on healthcare in 2013. Get a detailed breakdown of costs, funding sources, expenditures, and influencing factors.
Understanding how healthcare dollars are spent provides clarity on the financial dynamics within the sector. In 2013, the total healthcare spending in the United States reached approximately $2.9 trillion. This substantial figure reflects the collective investment in health services, medical goods, and related administrative activities across the country. The 2013 data represents a specific point in time, shaped by prevailing economic conditions and early policy implementations.
Overall Healthcare Spending in 2013
This substantial sum translated to approximately $9,255 spent per person across the nation. For several years, including 2013, healthcare spending maintained a consistent share of the country’s economic output. It accounted for 17.4 percent of the Gross Domestic Product (GDP), a proportion that had remained stable since 2009. The growth rate for healthcare spending in 2013 was 3.6 percent, marking the slowest annual increase since 1960. This rate reflected a deceleration of 0.5 percentage points compared to the growth observed in 2012.
Sources of Healthcare Spending in 2013
The funding for the nation’s healthcare expenditures in 2013 originated from various sources, with both public and private entities contributing significantly. Private health insurance represented a substantial portion of this funding, covering 33 percent of the total spending, amounting to approximately $962 billion. This category included premiums paid by individuals and employers for health coverage.
Government programs formed another major source of healthcare financing. Medicare, a federal health insurance program primarily for individuals aged 65 or older and certain younger people with disabilities, accounted for 20 percent of national health spending, or about $586 billion. Medicaid, a joint federal and state program providing healthcare coverage to low-income individuals and families, contributed 15 percent of total national health expenditures, totaling approximately $449.4 billion.
Individuals’ out-of-pocket spending, which includes co-payments, deductibles, and payments for services not covered by insurance, constituted 12 percent of the national health expenditures, reaching $339.4 billion. Other categories, such as other third-party payers and programs, made up 8 percent of the total. The Department of Defense and the Department of Veterans Affairs together contributed 3 percent to the overall healthcare spending.
Where Healthcare Dollars Went in 2013
The allocation of healthcare dollars in 2013 reflected the diverse services and goods consumed across the sector. A significant portion of spending was directed towards institutional care. Hospital care represented the largest share, accounting for 32.1 percent of the total healthcare expenditures. Spending in this category increased by 4.3 percent in 2013, indicating continued demand for inpatient and outpatient hospital services.
Physician and clinical services also absorbed a considerable amount of funding, making up 16.1 percent of the total and amounting to $586.7 billion. Retail prescription drugs constituted 9.3 percent of the spending, with total expenditures in this area growing by 2.5 percent in 2013, influenced by factors such as brand-name and specialty drug prices. These three categories—hospital care, physician and clinical services, and retail prescription drugs—collectively accounted for 61 percent of all healthcare spending in the U.S..
Other personal healthcare services, which encompass areas such as nursing home care, comprised 23.1 percent of the expenditures. The net cost of health insurance accounted for 5.9 percent of the healthcare dollars. Government public health activities utilized 2.6 percent of the spending, while government administration accounted for 1.3 percent.
Key Drivers of 2013 Spending
Several factors influenced the subdued growth in healthcare spending observed in 2013. The lingering effects of the 2007-2009 economic recession played a significant role, as economic downturns typically lead to slower growth in healthcare expenditures.
Early provisions of the Affordable Care Act (ACA), which began to take effect, also exerted a downward pressure on spending growth. These included reductions in federal payments to private Medicare Advantage plans and productivity adjustments to Medicare fee-for-service payments. The automatic 2 percent federal budget payment cuts, known as sequestration, further reduced Medicare spending in 2013.
Changes within Medicaid, such as increased prescription drug rebates and federal matching payments for primary care providers under the ACA, contributed to shifts in expenditures. An increase in patient cost-sharing through higher deductibles and co-payments also influenced utilization patterns. Increases in service price and intensity, along with population growth and aging demographics, were underlying contributors to overall healthcare spending trends during this period.