Health spending growth picked up in early 2015

Recently released economic data suggest that, after a period of historically low health care spending growth, growth rates have started to increase.

The latest figures from the Quarterly Services Survey (QSS), conducted by the U.S. Census Bureau, estimate that health care spending was 7.3% higher in the first quarter of 2015 as compared with the first quarter of 2014.  This is higher than the annual rates reported for 2013 and the first two quarters of 2014.

The QSS is a survey of the revenues and expenses of service sector businesses and provides the most reliable current estimate of health care spending. While the QSS does not cover all health spending – leaving out, for example, pharmaceuticals and medical devices, which are not considered services – it includes the vast majority of the health care spending.

 Within the health sector, hospital spending increased 9.2 percent between first quarter 2014 and first quarter 2015.  Greater use of services accounted for a portion of the increase — the number of hospital days rose 3.5% and the number of discharges rose 4% over the period — while price and intensity made up the remainder.  Spending on ambulatory health care (e.g., services in physician offices, hospital outpatient departments) increased by 5.9% over the period.

 While quarterly economic data can be volatile, the consecutive quarters of relatively high health care spending growth suggest that the period of historically low growth rates may be over.