New report breaks down U.S. healthcare spending 

By Jarrod Fowler, MHA
FMA Director of Health Care Policy and Innovation

A report recently published by Health Affairs shows that healthcare spending in the U.S. is growing fast – at a rate of 7.2% between 2023 and 2024 – and now tops $5 trillion, or 18% of GDP. The report is based on newly available data on healthcare spending in 2024, the latest year for which this information is available. 

Hospital care accounted for the largest share of healthcare spending, at 31% or $1.6 trillion. Demand for hospital services appears to be strong, with stay length and discharges both up. Spending on physician and clinical services (which also include non-physicians such as APRNs and PAs) accounted for 21%. Actual physician incomes accounted for far less, at an estimated 8.6% of spending. This is fairly in line with peer nations. By comparison, retail prescription drug spending accounts for 9%.  

The full breakdown is available here . 

The bottom line 

Healthcare spending continues to make up a growing share of the economy, and getting the right policies in place to rein in waste without stifling innovation or restricting access to care will be no simple task.