While not likely a surprise to anyone, healthcare spending is expected to continue growing for at least the next decade, and the numbers are pretty astronomical, according to a report from the Office of the Actuary at the Centers for Medicare and Medicaid Services.
Health expenditures are expected to double in the next 10 years and will be in the area of $6 trillion by 2027, according to the report.
For companies in the credit and collection industry, the number that might matter most is this: Out-of-pocket spending on healthcare is expected to grow by 4.8% per year between now and 2027, according to the report, and will represent about 10% of all healthcare expenditures.
The report includes a dizzying number of tables and spreadsheets, breaking down expenditures by different healthcare categories and offers an insightful glimpse into what the next decade is going to be like for the healthcare industry, which will account for nearly 20% of the country’s gross domestic product by the time we reach 2027.
Out-of-pocket payments on a per-capita basis are expected to increase to $1,661 by 2027, up from $1,155 currently, according to the report. By comparison, out-of-pocket expenses were $991 per person back in 2011.
Economic and demographic factors are expected to have the largest increase on healthcare expenses during the next decade, and will not be influenced by other events, such as the Great Recession. As more Baby Boomers become eligible for Medicare and the amount of disposable income for Americans grows, so too will healthcare spending, according to the report.
“Prices for health care goods and services are projected to grow somewhat faster over the course of the projection period, and faster than seen over the last decade,” said Andrea Sisko, an economist with the Office of the Actuary at the Centers for Medicare and Medicaid Services and the study’s lead author, during a conference call with reporters.
