Trends in health care spending

Health spending in the U.S. increased by 4.1% in 2022 to $4.5 trillion or $13,493 per capita. This growth rate is comparable to pre-pandemic rates (4.1% in 2019). Although government spending to manage the pandemic led to substantial increases in NHE, these expenditures significantly declined in 2021 while utilization of medical goods and services rebounded. By 2022, top-level patterns in health spending more closely reached that of the pre-pandemic period.

Overall, health spending was 17.3% of GDP in 2022, similar to pre-pandemic shares (17.5% in 2019) after an uptick in 2020 (19.5%) and 2021 (18.2%).

A new AMA Policy Research Perspective provides an in-depth look at U.S. health spending in 2022.

Policy Research Perspectives: National Health Expenditures, 2022: A Return to Pre-Pandemic Growth Rates As Spending on Physician Services Decelerates (PDF)

The United States spent $4,464.4 billion on health care in 2022.

This spending can be broken down into the following categories:

• Hospital care
• Physician services
• Clinical services
• Prescription drugs
• Nursing care facilities
• Home health care
• Other personal health care costs
• Government administration: includes all administrative costs associated with insuring individuals in health insurance programs
• Net cost of health insurance: The difference between what insurers incur in premiums and the amount paid in benefits. This includes administrative costs, additions to reserves, rate credits and dividends, premium taxes and fees, and net underwriting gains or losses
• Government public health activities
• Investment spending

Although physician services is the second largest category of health spending, it generally grows more slowly than spending in the other large categories of personal health care. From 2012 to 2022, the average annual growth rate was 4.2% for physician services, 4.4% for hospital care and 4.7% for prescription drugs.

In 2022, physician spending grew only 2.6% due to slow growth in both prices and utilization.* This comes after higher growth in 2020 from spending on federal relief programs and in 2021 from the rebound in utilization of medical goods and services. Likewise, hospital care spending grew only 2.2% in 2022 due to slow growth in prices and declines in hospital days and discharges.* However, prescription drug spending grew 8.4%, driven by an acceleration in prescription drug prices and increased utilization of retail prescription drugs.*

The report discusses this breakdown in further detail and also assesses spending by source of funds (i.e., private health insurance, Medicare, Medicaid, etc.) and sponsors (i.e., federal government, households, private businesses, etc.).

*Hartman, M., Martin, A., Whittle, L. and Catlin, A. National Health Care Spending In 2022: Growth Similar To Prepandemic Rates. Health Aff (Millwood). 2024 January; 43(1).

• Policy Research Perspectives: National Health Expenditures, 2021: Decline in pandemic-related government spending results in 8-percentage point decrease in total spending growth (PDF)
• Policy Research Perspectives: National Health Expenditures, 2020: Spending accelerates due to spike in federal government expenditures related to the COVID-19 pandemic (PDF)
• Policy Research Perspectives: National Health Expenditures, 2019: Steady spending growth despite increases in personal health care expenditures in advance of the pandemic (PDF)
• Policy research perspectives: National Health Expenditures, 2018: Spending growth remains steady even with increases in private health insurance and Medicare spending (PDF)
• Policy research perspectives: National health expenditures, 2017: The slowdown in spending growth continues (PDF)
• Policy research perspectives: National health expenditures, 2016: Annual spending growth on the downswing (PDF)
• Policy research perspectives: National health expenditures, 2015: Annual spending growth at its highest rate since 2007 (PDF)
• Policy research perspectives: National health expenditures, 2014: Spending grows by more than 5% for first time since 2007 (PDF)
• Policy research perspectives: National health expenditures, 2013: Another year, another record low for growth (PDF)
• Policy research perspectives: What's behind the recent spending slowdown? An overview of literature that tries to explain it (PDF)
• Policy research perspectives: Perspectives on the recent slowdown In health spending growth (PDF)
• Policy research perspectives: National health expenditures, 2010: slow growth continues (PDF)
• Policy research perspectives: National health expenditures: What do they measure? What’s new about them? What are the trends? (PDF)