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Between private insurance, Medicare, Medicaid, and personal out-of-pocket costs, America spent $3.7 trillion on personal healthcare in 2022, according to the Centers for Medicare and Medicaid Services (CMS). Personal healthcare expenditures come from various sources including private insurance, Medicare, Medicaid, and personal out-of-pocket costs.

The Centers for Disease Control and Prevention (CDC) defines personal healthcare as the goods and services relating directly to patient care, such as prescription drugs and hospital care. Expenditures are calculated by adding the total national health expenditures and then subtracting the cost of investment (in research and equipment, for example), health insurance administration, and public health.

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What’s the per-person cost of personal healthcare?

In 2020, national per capita personal healthcare spending varied widely by age: overall per-person spending for people 65 and older was $22,356, five times higher than spending per child ($4,217) and more than double adults younger than 65 ($9,154).

How has personal healthcare spending increased over the years?

National personal healthcare spending has increased by more than $3 trillion in the past 40 years, or 1,629%. Total personal healthcare expenditures rose from $214.3 billion in 1980 to $3.7 trillion in 2022 and per-person spending went from $932 to $11,193. Over the same period, the population grew by 47% and consumer prices in general went up 261%.

Healthcare costs typically rise faster than inflation because of specific trends that impact healthcare spending. These include technological developments, aging populations and other demographic changes, changes in how people use and access healthcare, and price increases for healthcare-related goods and services.

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Where are most healthcare dollars spent?

Hospital care has been the largest category of personal healthcare spending since CMS began collecting this data in 1960. In 2022, it totaled $1.35 trillion, or 36.6% of all personal healthcare spending, a percentage consistent with the previous decade’s spending.

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Which category’s spending has increased the most over time? The least?

Home healthcare was the largest spending increase between 1980 and 2022. Spending rose more than 5,400%, from $2.4 billion to $132.8 billion (not adjusted for inflation).

Spending on nursing care facilities and continuing-care retirement communities increased the least, growing 1,152% from $15.3 billion to $191.2 billion between 1980 and 2022.

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National Health Expenditure Accounts