Healthcare expenses appear to have climbed at a brisk pace, backing previous calculations that the healthcare industry remains a force even during an otherwise lackluster quarter.
The U.S. Commerce Department's Bureau of Economic Analysis released its second estimate of first-quarter economic growth, finding that healthcare spending climbed 5.4% annually when adjusted for inflation. That was down slightly from the BEA's first estimate of 5.5%.
The entire U.S. economy grew 2.7% year over year in the first quarter when adjusted for inflation. But the gross domestic product actually sank 0.2%, compared with the fourth quarter. The BEA originally pegged quarterly growth at 0.7%. Healthcare spending increased 1.3% from the fourth quarter of 2014 through the first three months this year.
The Altarum Institute Center for Sustainable Health Spending estimated even higher growth in health spending. Preliminary numbers indicate health expenditures increased 6.6% in the first quarter of 2015, the not-for-profit think tank said in its May health economic report.
However, the growth rate is likely to fall below the 6% mark, wrote Charles Roehrig, a health economist and director at Altarum. Spending on expensive hepatitis C drugs is expected to slow down as many payers and pharmacy benefits managers have signed discount deals with Gilead Sciences and AbbVie over the past few months, cutting their costs by an estimated 50%.
The number of people gaining health insurance will also be lower this year because the Affordable Care Act enrollment periods “should now be behind us,” the Altarum report said.
The BEA's third and final first-quarter estimate will come out June 24.