Healthcare spending rose a revised 4.6% on an annualized basis in the third quarter when compared to the second quarter, which recorded a 4% rise when compared with the first, a sign consumers may have started spending more for healthcare, the U.S. Commerce Department reported Tuesday.
The quarterly increase likely reflects that consumers have begun spending on healthcare services they postponed during and after the Great Recession, noted Dr. Rob Schreiner, managing director of the population health management practice at Chicago-based Huron Consulting. “The uptick in consumption, particularly toward preference sensitive conditions, is somewhat predictable as the economic cycle turns up,” he said.
The healthcare numbers were part of revisions to the gross domestic product which put overall U.S. economic growth at a robust 5% in the third quarter compared with the previously estimated 3.9%. The third-quarter overall GDP increase was the strongest seen in 11 years.
Consumer spending, in healthcare and on other services, was cited as a contributor to the overall uptick for the quarter. Consumer spending rose 3.2% in the third quarter compared with an increase of only 2.5% in the second quarter.
Growth in healthcare spending continues to lag overall economic growth, however. Health spending rose 2.8% on an annualized basis in the third quarter compared to the same quarter the prior year.
Overall U.S. healthcare spending on an annualized basis in the third quarter, adjusted for inflation, was put at $1.84 trillion compared to an inflation-adjusted $1.82 trillion in the second quarter, according to the data from the U.S. Commerce Department's Bureau of Economic Analysis. The estimate of health spending does not include goods, including pharmaceuticals.
Hospital spending was pegged at an annualized $839 billion on an inflation-adjusted basis compared with $828.5 billion in the second quarter.
The revisions in healthcare spending was partly attributable to having more data available upon which to base estimates, the Bureau of Economic Analysis said in a technical note to the GDP release. A final revision of the spending numbers will be published next July.
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