MedPAC Releases 2020 Data Book on Health Care Spending and the Medicare Program

By Policy and Advocacy Brief posted 08-04-2020 14:09


The Medicare Payment Advisory Commission (MedPAC) released its 2020 data book on health care spending and the Medicare program in July. The publication provides data on Medicare spending, demographics of the Medicare population, beneficiaries’ access to care, and quality of care in the program, among other information.

Data points of interest include:

  • Medicare was the largest single purchaser of personal health care in 2018. Of the total $3.1 trillion spent that year, Medicare spending accounted for $697 billion (23 percent).
  • In 2019, Medicare spent $787 billion on benefits. Managed care/Medicare Advantage accounted for 34 percent; inpatient hospital services accounted for 19 percent, Part D prescription drug spending accounted for 13 percent and services under the physician fee schedule accounted for 9 percent.
  • Medicare spending among services shifted significantly between 2010 and 2019. For instance, spending on Medicare Advantage plans in 2019 accounted for 34 percent of Medicare spending (up from 22 percent in 2010). This increase is attributed to a 96 percent increase in beneficiaries enrolled in Medicare Advantage since 2010.
  • Fee-for-service inpatient hospital services spending has declined as a share of total Medicare spending, and accounted for only 19 percent in 2019 (down from 26 percent in 2010). Spending for physician fee schedule services was down to 9 percent in 2019 (compared to 13 percent in 2010) while spending on fee-for-service outpatient services has grown from 5 percent in 2010 to 7 percent of 2019 Medicare spending. MedPAC attributes this change to physicians being acquired by hospitals and beginning to bill under the hospital outpatient prospective payment system (HOPPS).
  • Drug costs are projected to grow faster than Part A and Part B expenditures, and to account for 14 percent of Medicare expenditures by 2085.
  • Health care spending as a share of GDP more than doubled from 1975 to 2015, increasing from 7.9 percent to 17.6 percent. Private health insurance spending, Medicare spending, and Medicaid all more than tripled over that same time period, increasing from 1.8 percent to 5.8 percent, from 1.0 percent to 3.6 percent, and from 0.8 percent to 3.0 percent, respectively, as a share of GDP. Medicare spending is projected to reach 6 percent of GDP in 2045.

Read the full report.

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