AMA Analysis Sheds Light on Hospital Care’s Role in Health Spending

As U.S. health expenditures climbed by 7.5% in 2023 to reach $4.9 trillion—or $14,570 per person—the acceleration was driven in large part by increased utilization of health care services, including hospital care. This marks the highest growth rate since 2003 (8.5%) outside the pandemic driven surge of 2020, and for the first time since COVID 19, health spending growth outpaced GDP expansion (7.5% vs. 6.6%).

Hospital Services and Utilization at the Forefront

Hospital care remains one of the largest components of national health spending. Till then, hospital services—alongside physician services—experienced an average annual growth rate of 5.3%, underscoring the sector’s sustained expansion amid evolving care delivery models.

Growth Outpacing Economic Expansion

The rebound was fueled by higher utilization rates and a historically high insured population share of 92.5%. With overall health spending at 17.6% of GDP—nearly matching pre pandemic levels—the AMA highlights that hospital care’s growth trajectory is a critical factor in broader economic and policy discussions.

Policy Research Perspective

A newly released AMA Policy Research Perspective delves deeper into the dynamics of U.S. health spending.

As policymakers and health system leaders navigate cost containment and access challenges, these findings emphasize the importance of targeted strategies for hospital resource management and value based care initiatives.

Source: https://www.ama-assn.org/about/ama-research/trends-health-care-spending

Prepared by: Next Move Strategy Consulting