The healthcare sector in the United States
The healthcare sector represents a significant portion of the Gross Domestic Product (GDP) in the United States, notes Performant Financial Corporation.
The company provides audit, recovery and analysis technology services in the United States, primarily to the healthcare sector.
According to the Center for Medicare and Medicaid Services (CMS) National Healthcare Expenditure (NHE) Projections, U.S. healthcare spending grew 2.7% in 2021, reaching $4.3 trillion from $4.1 trillion in 2020.
National healthcare spending is projected to grow at an average annual rate of 5.5% by 2018-27 and reach nearly $6.2 trillion in 2028.
As a share of the nation’s GDP, national healthcare spending accounted for 18.3% in 2021, down from 19.7% in 2020.
Federally related spending grew 8.4% to $900.8 billion in 2021 for Medicare, which provides a range of health coverage primarily to older and disabled Americans, and grew 9.2% to $734 billion in 2021 for Medicaid, which provides federal matching funds to states to finance health care for people at or below the public assistance level.
Healthcare sector
In 2021-30, Medicare spending is projected to increase at an average rate of 7.4% per year.
In 2021-23, Medicaid spending is projected to increase at an average rate of 5.5 percent.
Medicare was initially established as part of the Social Security Act of 1965 and consists of four parts: Part A covers inpatient hospital stays and other hospitalizations, Part B covers hospital, physician, and other outpatient services, Part C is known as Medicare Advantage, under which beneficiaries receive benefits through private health plans, and Part D is the Medicare outpatient prescription drug benefit.
CMS estimated that for Medicare Part A and Part B spending in 2020, approximately $25.7 billion, or 6.3%, was improper.
Typically, improper Medicare payments involve incorrect coding, procedures performed that were not medically necessary, and incomplete documentation or claims submitted based on outdated fee schedules, among other issues.
In addition to public healthcare spending, significant growth in spending in the private healthcare market is expected.
According to CMS NHE projections, the private healthcare market accounted for approximately $1.2 trillion in spending in 2021.
Private healthcare spending is projected to grow 4.6% per year on average from 2021 to 2023 and 5.0% per year on average from 2024 to 2028, according to Performant Financial Corporation.
