National Health Expenditures

Watchdog Vigilance Home Page Health Care Policies Pertinent Historical Data Federal Government Health Programs Spending National Debt History Medicare Expansion (ME)

The content of this web page is arranged under the following headings:
1. 1960-2015 Per Capita National Health Expenditures
2. Glossary
3. 2015 National Health Expenditures by Source of Funds
4. 2015 National Health Expenditures by Type of Service or Product

1. 1960-2015 Per Capita National Health Expenditures

Source Documents: 
A. NHE Summary including share of GDP, CY 1960-2015 [ZIP, 18KB] at https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nationalhealthaccountshistorical.html
B. Consumer Price Index at http://www.finplaneducation.net/consumer_price_index.htm 

All of the National Health Expenditures data on this web page was analyzed to reach the following findings:
A. National Health Expenditures Per Capita in 2010 ($8,404) increased 5,656% from 1960 ($146).
B. Inflation in 2010 (218.056 CPI) increased 637% from 1960 (29.6 CPI).
C. National Health Expenditures Per Capita increased 8.88 times more than Inflation from 1960 to 2010.
D. National Health Expenditures Per Capita in 2010 ($8,404) increased 2,267% from 1970 ($355).
E. Inflation in 2010 (218.056 CPI) increased 462% from 1970 (38.8 CPI).
F. National Health Expenditures Per Capita increased 4.91 times more than Inflation from 1970 to 2010.
G. National Health Expenditures Per Capita in 2010 ($8,404) increased 658% from 1980 ($1,108).
H. Inflation in 2010 (218.056 CPI) increased 165% from 1980 (82.4 CPI).
I. National Health Expenditures Per Capita increased 3.99 times more than Inflation from 1980 to 2010.
J. National Health Expenditures Per Capita in 2010 ($8,404) increased 196% from 1990 ($2,843).
K. Inflation in 2010 (218.056 CPI) increased 67% from 1990 (130.7 CPI).
L. National Health Expenditures Per Capita increased 2.93 times more than Inflation from 1990 to 2010.
M. National Health Expenditures Per Capita in 2010 ($8,404) increased 73% from 2000 ($4,857).
N. Inflation in 2010 (218.056 CPI) increased 27% from 2000 (172.2 CPI).
O. National Health Expenditures Per Capita increased 2.70 times more than Inflation from 2000 to 2010.
P. National Health Expenditures Per Capita in 2015 ($9,990) increased 18.87% from 2010 ($8,404).
Q. Inflation in 2015 (237.017 CPI) increased 8.70% from 2010 (218.056 CPI).
R. National Health Expenditures Per Capita increased 2.17 times more than Inflation from 2010 to 2015.
S. The 2015 Medicare Administration Expense was 6.38% ($41.219 billion of the $646.243 billion total Medicare health expenditures).
T. The 2015 Department of Defense Administration Expense was 7.64% ($3.191 billion of the $41.786 billion total DOD health expenditures).
U. The 2015 Medicaid Administration Expense was 10.76% ($58.676 billion of the $545.132 billion total Medicaid health expenditures).
V. The 2015 Private Health Insurance Administration Expense was 11.88% ($127.370 billion of the $1.072057 trillion total PHI health expenditures).
W. The 2015 Children’s Health Insurance Program Administration Expense was 17.73% ($2.592 billion of the $14.620 billion total CHIP health expend.).
X. The 2015 Other Third Party Administration Expense was 7.84% ($19.386 billion of the $247.225 billion total Other Third Party health expenditures).
Y. The 2015 Department of Veteran Affairs Administration Expense was 0.4% ($235 million of the $64.688 billion total VA health expenditures).

The conclusions listed next are indicated by the above findings.

CONCLUSION #1. The National Health Expenditures Per Capita increase from 2010 to 2015 (which was 2.17 times more than the Inflation increase) falls somewhat short of the desirable goal of having per capita U.S. health care spending increases that are no more than the general inflation increases.

CONCLUSION #2. Increases in National Health Expenditures Per Capita have steadily declined from 1960 through 2015.

CONCLUSION #3. The National Health Expenditures Per Capita increase for the time period 2010 to 2015 was significantly LESS than the increases for the preceding time periods.

CONCLUSION #4. Medicare administration expenses are somewhat lower than other health expenditure payers, including Private Health Insurance.

CONCLUSION 5. It appears that the Department of Veteran Affairs should be allocated more funds for administration expenses.

2. Glossary

Source Document: Definitions, Sources, and Methods [PDF, 1MB] at https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nationalhealthaccountshistorical.html.

Administration and Total Net Cost of Health Insurance Expenditures include the administrative costs of health care programs such as Medicare and Medicaid as well as the net cost of Private Health Insurance. Net cost is the difference between private health insurance expenditures and benefits incurred and includes administrative costs, additions to reserves, rate credits and dividends, premium taxes and fees, and net underwriting gains or losses.

Children's Health Insurance Program (CHIP) is a joint federal/State program that provides health insurance for children in families that do not have health insurance coverage and are not eligible for Medicaid.

Department of Defense health care program - TRICARE - covers members of the uniformed services, their families and their survivors, as well as retired members and their families.

Durable Medical Equipment includes retail sales of items such as contact lenses, eyeglasses and other ophthalmic products, surgical and orthopedic products, medical equipment rental, oxygen and hearing aids. Durable medical equipment generally has a useful life of over three years.

Equipment is comprised of the value of new capital equipment (including software) purchased or put in place by the medical sector during the year. This measure of medical sector investment includes establishments engaged in providing health care, but does not include retail establishments that sell non-durable or durable medical goods. Non-structural equipment such as X-ray machines and beds are included in equipment.

General Assistance refers to direct payments or payments to vendors to or on behalf of needy persons who do not qualify for federally financed assistance programs. It is provided by state and local government jurisdictions, and is not financed in whole or part by federal funds. General assistance may be administered by the state welfare agency, a local agency, or a local agency under state supervision. Eligibility requirements and payment levels of general assistance programs vary greatly from state to state and often within a state.

Indian Health Services is an agency within the Department of Health and Human Services that is responsible for providing federal health services to American Indians and Alaska Natives. The provision of health services to members of federally-recognized tribes grew out of the special government-to-government relationship between the federal government and Indian tribes. Indian Health Services provides a comprehensive health service delivery system for approximately 1.9 million American Indians and Alaska Natives who belong to 566 federally recognized tribes in 35 states.

Investment includes spending for noncommercial biomedical research and expenditures by health care establishments on structures and equipment.

Maternal/Child Health is a Federal-State partnership program. States and jurisdictions design and implement a wide range of maternal and child health programs that meet national and state goals such as reducing infant mortality and the incidence of handicapping conditions among children, increasing the number of immunized children, increasing the number of children in low-income households who receive assessments and follow-up diagnostic and treatment services, providing access to comprehensive prenatal care for women; and facilitating the development of comprehensive, family-centered systems of care for children with special health care needs. The States are required by law to spend three dollars for every four federal dollars allocated.

Medicaid is a joint state and federal insurance program that is available only to certain low-income individuals and families who fit into an eligibility group that is recognized by federal and state law.

Medicare is a health insurance program for people age 65 or older, people under the age of 65 with certain disabilities, and people of all ages with end-stage renal disease.

Nursing care facilities & continuing care retirement communities are (a) freestanding private sector, local government, and state government establishments primarily engaged in providing inpatient nursing, rehabilitative, and continuous personal care services to persons requiring nursing care (including memory care); (b) continuing care retirement communities with on-site nursing care facilities; and (c) nursing facilities operated by the Department of Veterans Affairs (VA). Note: hospital-based nursing home care is categorized as hospital care.

Other Federal Programs include federal general hospital/medical expenditures, Office of Economic Opportunity , Non-XIX federal, and pre-existing conditions insurance plans. The Office of Economic Opportunity and Non-XIX Federal are both programs that no longer exist. Pre-existing conditions insurance plans were created under the Affordable Care Act to provide a health coverage option for U.S. citizens and legal residents that have been without health coverage for at least six months, have a pre-existing condition, or have been denied health coverage because of their health condition.

Other Non-durable Medical Products include non-prescription drugs (products purchased over the counter such as analgesics and cough and allergy medications) and medical sundries (items such as surgical and medical instruments and surgical dressings, and diagnostic products such as needles and thermometers). Non-durable products generally last less than three years.

Other Private Revenues are commonly provided through philanthropy. Philanthropic support may be direct from individuals or may be obtained through philanthropic fund-raising organizations such as the United Way, or other foundations or corporations. Philanthropic revenues may be spent directly for patient care or may be held in an endowment fund to produce income to cover current expenses. For institutions such as hospitals and nursing homes, other private funds also include income from the operation of gift shops, cafeterias, parking lots, educational programs, and investment income.

Other State and Local Programs include temporary disability insurance, state and local subsidies to providers, and Non-XIX state and local funding. In general, all spending by state and local governments that is not reimbursed by the federal government (through benefit payments or grants-in-aid) nor by patients or their agents is treated as state and local expenditures. Temporary disability insurance includes medical care benefits provided to workers as a result of temporary non-occupational disability or short-term sickness - this benefit is currently offered solely in the state of New York. State and local subsidies are payments by the state and local government to hospitals, home health agencies, and other facilities owned by the state. Non-XIX state and local funding is a program that no longer exists. As with federal expenditures, payment for employee health insurance by state and local governments is included under Private Health Insurance expenditures.

Out-of-Pocket spending for health care consists of direct spending by consumers for health care goods and services. Included is the amount paid out-of-pocket for services not covered by insurance and the amount of coinsurance or deductibles required by Private Health Insurance and public programs such as Medicare and Medicaid (not paid by some other third party), as well as payments covered by health savings accounts. Premium payments for insurance plans such as Private Health Insurance and Medicare are not included in out-of-pocket spending.

Private Health Insurance plans include fully-insured and self-insured health plans. Fully-insured plans are health insurance plans where the insurance company takes on all of the risk of insuring the plan’s beneficiaries. Self-insured plans are offered by employers and other groups who directly assume the major cost and risk of health insurance for their employees or members, with some self-insured employers or groups bearing the entire risk. Self-insured groups can also insure against large claims by purchasing stop-loss insurance plans. Stop-loss coverage is a form of reinsurance that limits the amount an employer will have to pay for each person’s health care (individual limit) or for the total expense of the company (group limit). In addition, some self-insured groups’ contract with traditional carriers or third-party administrators for claims processing and other administrative services while other self-insured plans are self-administered.

Public Health Activity is where the government, in addition to funding the care of individual citizens, is involved in organizing and delivering publicly provided health services such as epidemiological surveillance, inoculations, immunization/vaccination services, disease prevention programs, the operation of public health laboratories, and other such functions. The Food and Drug Administration and the Centers for Disease Control and Prevention account for the great majority of federal spending in this category. Substantial federal public health funding also comes from the Public Health and Social Services Emergency Fund and the Department of Homeland Security. State and local government public health activity expenditures are primarily for the operation of state and local health departments. Federal payments to state and local governments are deducted to avoid double counting.

School Health includes expenditures for students in primary and secondary public and private schools. This may include school nursing services, hearing and vision tests, as well as more comprehensive clinical services.

Structures are defined as the value of new construction put in place by the medical sector. This measure of the medical sector investment includes establishments engaged in providing health care, but does not include retail establishments that sell non-durable or durable medical goods. The construction measure includes new buildings; additions, alterations, and major replacements; mechanical and electric installations; and site preparation. The value of new construction put in place includes the cost of materials and labor, contractor profit, the cost of architectural and engineering work, those overhead and administrative costs chargeable to the project on the owner’s books, and interest and taxes paid during construction. Maintenance and repairs are excluded.

Substance Abuse and Mental Health Services Administration (SAMHSA) provides grants or outlays for program areas such as: Substance Abuse Treatment Capacity, Mental Health System Transformation, Strategic Prevention Framework, Co-Occurring Disorders, Seclusion & Restraint (elimination of), Older Adults, and HIV/AIDS & Hepatitis.

Vocational Rehabilitation program provides funds from the federal and state and local government for the rehabilitation of individuals with physical and mental impairments.

Workers' Compensation includes expenditures for medical benefits that are paid for by federal and state and local workers compensation programs. The U.S. Department of Labor, Office of Workers' Compensation Programs administers compensation programs which provide benefits to federal workers or their dependents that are injured at work or acquire an occupational disease. Non-federal workers’ compensation programs are financed almost exclusively by employers. All non-federal workers’ compensation programs are designed and administered by the state. Generally state laws require that all non-federal employers purchase insurance, either from commercial (private) insurers or from publicly operated state funds, or prove that they have the financial ability to carry their own risk.

Worksite Health Care represents expenditures directly provided by employers for their employees. This includes services such as those provided at an on-site health unit, such as the administration of flu shots and blood tests, or more extensive medical care such as onsite physician or hospital services.

3. 2015 National Health Expenditures by Source of Funds

Source Document: National Health Expenditures by type of service and source of funds, CY 1960-2015 [ZIP, 104KB] at https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nationalhealthaccountshistorical.html.

 

NATIONAL HEALTH EXPENDITURES
BY SOURCE OF FUNDS
CALENDAR YEAR 2015
Expenditure Amount (Millions of Dollars)
Out of Pocket	338,150	338,150
Health Insurance	2,384,526
Private Health Insurance		1,072,057
Medicare		646,243
Medicaid (Title XIX)		545,132
Federal			344,033
State and Local			201,099
CHIP (Title XIX and Title XXI)		14,620
Federal			10,913
State and Local			3,707
Department of Defense		41,786
Department of Veterans Affairs		64,688
Other Third Party Payers and Programs	247,225
Worksite Health Care		6,066
Other Private Revenues		124,259
Indian Health Services		3,770
Workers' Compensation		49,416
General Assistance		6,834
Maternal/Child Health		3,704
Federal			570
State and Local			3,134
Vocational Rehabilitation		534
Federal			412
State and Local			122
Other Federal Programs*		12,263
SAMHSA		3,473
Other State and Local Programs**		32,294
School Health		4,612
Public Health Activity	80,926
Federal Funds		11,289
State and Local Funds		69,637
Investment	154,733
Research		46,714
Private			5,301
Federal Gov't			34,694
State and Local Gov't			6,719
Structures		48,950
Private			41,720
Federal Gov't			2,142
State and Local Gov't			5,088
Equipment		59,069
Private			43,808
Federal Gov't			5,363
State and Local Gov't			9,898
GRAND TOTAL NATIONAL HEALTH EXPENDITURES BY SOURCE	3,205,560	3,205,560
Total CMS Programs (Medicaid, CHIP and Medicare)	1,205,997	1,205,997
* Other Federal Programs include OEO, Federal General and Medical, Federal General and Medical NEC,
and High Risk Pools under ACA.
** Other State and Local Programs include State and Local Subsidies and TDI
SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group.

4. 2015 National Health Expenditures by Type of Service or Product

Source Document: National Health Expenditures by type of service and source of funds, CY 1960-2015 [ZIP, 104KB] at https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nationalhealthaccountshistorical.html.

 

NATIONAL HEALTH EXPENDITURES
BY TYPE OF SERVICE OR PRODUCT
CALENDAR YEAR 2015
Expenditure Amount (Millions of Dollars)
Hospital Expenditures
Out of pocket	32,128	32,128
Health Insurance	909,099
Private Health Insurance		403,622
Medicare		256,998
Medicaid (Title XIX)		185,135
Federal			119,450
State and Local			65,686
CHIP (Title XIX and Title XXI)		3,714
Federal			2,785
State and Local			929
Department of Defense		15,154
Department of Veterans Affairs		44,476
Other Third Party Payers and Programs	94,884
Other Private Revenues		55,799
Indian Health Services		1,910
Workers' Compensation		16,035
General Assistance		3,242
Maternal/Child Health		321
Federal			53
State and Local			268
Vocational Rehabilitation		113
Federal			87
State and Local			26
Other Federal Programs*		1,423
SAMHSA		175
Other State and Local Programs**		15,866
TOTAL Hospital Expenditures (445,847 from Medicaid, CHIP & Medicare)	1,036,111	1,036,111
Physician & Clinical Expenditures
Out of pocket	56,618	56,618
Health Insurance	514,733
Private Health Insurance		272,269
Medicare		144,310
Medicaid (Title XIX)		69,697
Federal			48,858
State and Local			20,839
CHIP (Title XIX and Title XXI)		3,402
Federal			2,572
State and Local			830
Department of Defense		15,117
Department of Veterans Affairs		9,938
Other Third Party Payers and Programs	63,567
Other Private Revenues		41,615
Indian Health Services		1,022
Workers' Compensation		13,345
General Assistance		803
Maternal/Child Health		186
Federal			61
State and Local			125
Vocational Rehabilitation		272
Federal			210
State and Local			62
Other Federal Programs*		5,172
SAMHSA		1,079
Other State and Local Programs**		73
TOTAL Physician & Clinical Expend. (217,409 Medicaid, CHIP & Medicare)	634,918	634,918
Dental Services Expenditures
Out of pocket	46,875	46,875
Health Insurance	70,200
Private Health Insurance		54,692
Medicare		454
Medicaid (Title XIX)		11,509
Federal			7,607
State and Local			3,902
CHIP (Title XIX and Title XXI)		1,632
Federal			1,226
State and Local			406
Department of Defense		1,722
Department of Veterans Affairs		191
Other Third Party Payers and Programs	448
Other Private Revenues		59
Indian Health Services		210
General Assistance		147
Maternal/Child Health		32
Federal			10
State and Local			22
TOTAL Dental Services Expenditures (13,595 Medicaid., CHIP & Medicare)	117,523	117,523
Other Professional Services Expenditures
Out of pocket	21,772	21,772
Health Insurance	58,688
Private Health Insurance		30,196
Medicare		21,230
Medicaid (Title XIX)		6,973
Federal			4,518
State and Local			2,455
CHIP (Title XIX and Title XXI)		289
Federal			230
State and Local			59
Other Third Party Payers and Programs	7,256
Other Private Revenues		4,683
Workers' Compensation		1,563
General Assistance		76
Maternal/Child Health		924
Federal			198
State and Local			726
Other State and Local Programs**		10
TOTAL Other Prof. Serv. Expend. (28,492 Medicaid, CHIP & Medicare)	87,716	87,716
Home Health Care Expenditures
Out of pocket	8,804	8,804
Health Insurance	77,268
Private Health Insurance		9,436
Medicare		35,131
Medicaid (Title XIX)		32,021
Federal			18,337
State and Local			13,684
CHIP (Title XIX and Title XXI)		49
Federal			38
State and Local			11
Department of Veterans Affairs		631
Other Third Party Payers and Programs	2,732
Other Private Revenues		1,123
General Assistance		295
Other State and Local Programs**		1,314
TOTAL Home Health Care Expend. (67,201 Medicaid, CHIP & Medicare)	88,804	88,804
Other Non-Durable Medical Products Expenditures
Out of pocket	56,778	56,778
Health Insurance	2,253
Medicare		2,253
TOTAL Oth. Non-Dur. Med. Prod. Expen. (2,253 Medicaid, CHIP, Medicare)	59,031	59,031
Prescription Drug Expenditures
Out of pocket	45,540	45,540
Health Insurance	277,020
Private Health Insurance		139,765
Medicare		94,122
Medicaid (Title XIX)		31,764
Federal			21,051
State and Local			10,713
CHIP (Title XIX and Title XXI)		1,494
Federal			1,090
State and Local			404
Department of Defense		6,601
Department of Veterans Affairs		3,275
Other Third Party Payers and Programs	1,992
Indian Health Services		29
Workers' Compensation		820
General Assistance		1,057
Maternal/Child Health		78
Federal			31
State and Local			47
Other State and Local Programs**		7
TOTAL Prescription Drug Expend. (127,380 Medicaid, CHIP & Medicare)	324,552	324,552
Durable Medical Equipment Expenditures
Out of pocket	23,322	23,322
Health Insurance	24,287
Private Health Insurance		8,987
Medicare		7,852
Medicaid (Title XIX)		7,314
Federal			4,851
State and Local			2,462
CHIP (Title XIX and Title XXI)		134
Federal			104
State and Local			30
Other Third Party Payers and Programs	848
Indian Health Services		9
Workers' Compensation		665
General Assistance		21
Maternal/Child Health		61
Federal			15
State and Local			46
Vocational Rehabilitation		89
Federal			69
State and Local			21
Other State and Local Programs**		3
TOTAL Durable Med. Equip. Expend. (15,300 Medicaid, CHIP & Medicare)	48,457	48,457
Nursing Care Facilities & Continuing Care Retirement Communities
Out of pocket	40,076	40,076
Health Insurance	105,724
Private Health Insurance		13,416
Medicare		37,629
Medicaid (Title XIX)		49,686
Federal			28,558
State and Local			21,128
CHIP (Title XIX and Title XXI)		8
Federal			6
State and Local			2
Department of Veterans Affairs		4,985
Other Third Party Payers and Programs	10,998
Other Private Revenues		7,662
General Assistance		452
Other State and Local Programs**		2,884
TOTAL Nurs. Care Fac. & Cont. Care Ret. Com. (87,323 Med., CHIP, Med.)	156,798	156,798
Other Health, Residential, and Personal Care Expenditures
Out of pocket	6,237	6,237
Health Insurance	111,971
Private Health Insurance		12,304
Medicare		5,047
Medicaid (Title XIX)		92,357
Federal			52,922
State and Local			39,435
CHIP (Title XIX and Title XXI)		1,306
Federal			927
State and Local			379
Department of Veterans Affairs		957
Other Third Party Payers and Programs	45,114
Worksite Health Care		6,066
Other Private Revenues		13,318
Indian Health Services		404
General Assistance		741
Maternal/Child Health		1,876
Federal			198
State and Local			1,678
Other Federal Programs*		3,823
SAMHSA		2,137
Other State and Local Programs**		12,137
School Health		4,612
TOTAL Other Health, Resid., and Pers. Care (98,710 Medicaid, CHIP, Med.)	163,322	163,322
Administration and Total Net Cost of Health Insurance Expenditures
Health Insurance	233,283
Private Health Insurance		127,370
Medicare		41,219
Medicaid (Title XIX)		58,676
Federal			37,880
State and Local			20,796
CHIP (Title XIX and Title XXI)		2,592
Federal			1,935
State and Local			658
Department of Defense		3,191
Department of Veterans Affairs		235
Other Third Party Payers and Programs	19,386
Indian Health Services		185
Workers' Compensation		16,988
Maternal/Child Health		226
Federal			3
State and Local			222
Vocational Rehabilitation		60
Federal			46
State and Local			14
Other Federal Programs*		1,845
SAMHSA		82
TOTAL Admin. & Total Net Cost of Health Ins. (102,487 Med., CHIP, Med.)	252,669	252,669
Public Health Activity	80,926
Federal Funds		11,289
State and Local Funds		69,637
TOTAL Public Health Activity	80,926	80,926
Investment	154,733
Research		46,714
Private			5,301
Federal Gov't			34,694
State and Local Gov't			6,719
Structures & Equipment		108,019
Structures - Private			41,720
Structures - Federal Gov't			2,142
Structures - State and Local Gov't			5,088
Equipment - Private			43,808
Equipment - Federal Gov't			5,363
Equipment - State and Local Gov't			9,898
TOTAL Investment	154,733	154,733
GRAND TOTAL HEALTH SPENDING BY TYPE OF SERVICE OR PRODUCT	3,205,560	3,205,560
Total CMS Programs (Medicaid, CHIP and Medicare)	1,205,997	1,205,997
* Other Federal Programs include OEO, Federal General and Medical, Federal General and Medical NEC,
and High Risk Pools under ACA.
** Other State and Local Programs include State and Local Subsidies and TDI
SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group.

Watchdog Vigilance Home Page Health Care Policies Pertinent Historical Data Federal Government Health Programs Spending National Debt History Medicare Expansion (ME)

This page was last updated on 08/08/17.