US healthcare spending climbed 7.2% in 2024: 8 things to know

U.S. healthcare spending reached $5.3 trillion in 2024, a 7.2% increase from $4.9 trillion the previous year, and similar to 7.4% growth in 2023, according to a CMS analysis published Jan. 14 by Health Affairs.

Eight things to know, per the analysis:

1. Healthcare spending accounted for 18% of GDP in 2024, up from 17.7% in 2023.

2. Healthcare spending growth in 2023 and 2024 reflected increased use and intensity of healthcare goods and services.

3. Hospital care spending (31% of total healthcare spending) was $1.6 trillion in 2024, reflecting an 8.9% increase from $1.5 trillion the previous year. This compared with 10.6% growth in 2023.

4. Spending for physician and clinical services (21% of total healthcare spending) was $1.1 trillion in 2024, reflecting an 8.1% increase from $1 trillion the previous year. This compared with 7.4% growth in 2023.

5. Retail prescription drug spending (9% of total healthcare spending) was $467 billion in 2024, a 7.9% increase from the previous year. This compared with 10.8% growth in 2023. Study authors partially attributed the slower growth to slower growth in retail prescription drug prices, as well as slower growth in the use of medicines.

6. The insured share of the population reached 92.5% in 2023, compared with 91.8% in 2024. Study authors noted that in 2024, Medicaid enrollment declined amid enrollment gains in marketplace plans and employer-sponsored private health insurance. 

7. Federal government-sponsored healthcare spending increased 5.5% in 2024, compared with 3.8% growth in 2023.

8. “The future of health care spending remains uncertain,” the study authors wrote. “Although some of the recent factors affecting utilization and insurance coverage might not persist, health spending trends are certain to be affected by future economic and demographic changes, as well as by new technologies and innovations. 

“For example, developments in artificial intelligence and cancer treatment, as well as expanding policies and use around weight loss treatments and other healthy behavior initiatives, may affect the health care system in unexpected ways.”

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