What’s driving $4.9T in U.S. healthcare spending? (TechTarget)

Healthcare spending in the U.S. surged to $4.9 trillion in 2023, marking a 7.5% increase from the previous year, driven by rising hospital care costs, private insurance expenditures, and the growing use of high-cost medications like diabetes and obesity treatments. Hospital care and private health insurance each accounted for $1.5 trillion, with hospital spending seeing its fastest growth since 1990 at 10.4%. Medicare and Medicaid also experienced accelerated spending, fueled by greater service use and policy shifts like value-based care and benefit enhancements. Retail prescription drug spending spiked by 11.4%, reversing years of declining prices, while physician services spending rose 7.4%, primarily due to nonprice factors. As healthcare expenditures continue to outpace GDP growth—now at 17.6% of GDP—can the system sustain this trajectory, or is a reckoning inevitable?