The Centers for Medicare & Medicaid Services (CMS) projects that National Health Expenditures (NHE) will grow at an average annual rate of 5.6% from 2023 to 2032, outpacing the projected average gross domestic product growth rate of 4.3%. This increase would raise healthcare spending's share of GDP from 17.3% in 2022 to 19.7% in 2032.
Key projected impacts on hospitals and healthcare facilities include:
- Increased Spending Growth On Hospital Services: Hospitals can expect an average annual spending growth rate of 5.7% from 2023 to 2032, driven by increased hospital usage among insureds covered by nearly all types of payers (though with different payers driving spending growth in various years).
- Medicare and Medicaid: Medicare spending growth is projected to average 7.4% annually, influenced by baby boomer enrollments. Medicaid growth is projected to average a lower 5.2% in part due to resumed state eligibility redeterminations and subsequent enrollment stabilization.
- Private Insurance: Private health insurance spending is projected to grow an average of 5.6% annually, with fluctuations in enrollment due to changes in enhanced Marketplace subsidies.
- Out-of-Pocket Costs: These are expected to grow at an average rate of 4.7%, partly due to new caps on Medicare Part D expenses.
- Physician and Clinical Services: Spending in this area is projected to match the overall NHE growth at 5.6%.
- Retail Prescription Drugs: CMS expects a higher average growth rate of 6.0%, influenced by drug pricing reforms and the introduction of new medications.