Nursing homes and continuing care retirement communities (CCRCs) made up $191.3 billion of national health expenditures in 2022, an increase from $181.1 billion in 2021, reaching levels close to the onset of the Covid-19 pandemic.
Pre-pandemic, such expenditures sat between $162 billion and $174.1 billion between 2016 and 2019, according to a survey published by Health Affairs. Data on national health care spending was collected by the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary, National Health Statistics Group.
In other words, nursing home and CCRC spending grew 5.6% in 2022, after dropping 7.8% in 2021. At the start of the pandemic in 2020, spending in this area increased by 12.8%, according to the Health Affairs study. Spending for the sector in 2020 stood at $196.4 billion.
Another Health Affairs study from June anticipated nursing care and CCRC spending to reach $283.3 billion by 2031, growing on average 5.4% per year.
With the exception of 2017, which saw less than 1% of annual growth, pre-pandemic years saw annual growth between 2.6% and 3.9%.
Nursing home spending consists mostly of Medicare and Medicaid, said Anne Martin, economist with the National Health Statistics Group with the Office of the Actuary for CMS. Data shows there was a decline in Medicare spending in 2021 along with a reduction in third party payers and programs – the real driver of a dip in 2021.
Along with Martin, Micah Hartman, Lehka Whittle, and Aaron Catlin presented findings in a press briefing on Wednesday.
Supplemental federal funding fits into the third party payers and programs piece, she said, which went from $20 billion in 2020 to about $3 billion in 2021.
“Most of the decline is coming from that category,” said Martin.
Health Affairs had a separate section on Covid federal supplemental funding showing the $17 billion drop between 2020 and 2021, then only 0.1% for 2022.
Overall, nursing homes and CCRCs only made up 4% of the nation’s health spending. Hospital care, physician and clinical services, and “other spending” made up the lion’s share with 30%, 20% and 23%, respectively.
“Other spending” includes dental services, home health care, durable medical equipment, other nondurable medical products, government public health activities and investments.
National health spending increased 4.1% in 2022, a faster rate than 3.2% in 2021 but slower than 10.6% in 2020, the researchers found. Lower growth compared to 2020 was attributed to decreased Covid federal spending following a large increase in 2020 in response to the pandemic.
In terms of payers, Medicaid and private health insurance saw strong growth partly driven by increased enrollment, according to Health Affairs.
National health expenditures represented a 17.3% share of Gross Domestic Product (GDP) in 2022, consistent with the average share of 17.5% between 2016 and 2019.
Companies featured in this article:
CMS, Health Affairs, Office of the Actuary at the Centers for Medicare & Medicaid Services
