How Do You Spend $3 Trillion on Healthcare?

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Hey, Big Spender

Read or listen to any report on the government’s budget and you’re almost certain to hear one thing: that healthcare eats up a huge part of it. In fact, it clocks in at around $3 trillion—an astonishing amount by any measure. That amounts to 18 percent of the nation’s gross domestic product (GDP), the output of goods and services.

If you’ve ever wondered where that money actually goes, we’ve run the numbers, using data from the Centers for Medicare and Medicaid Services.

Here we count down how the healthcare pie is split, from the “smaller” pieces to what costs the most. Read on to find out how you spend $3 trillion…

Photo Credit: Creative Commons/Flickr

#10: Durable Medical Retail Equipment

Lost that left contact lens—again? Durable medical equipment, which means products used by patients for an extended period of time, cost $38.9 billion in 2011, a 5.3 percent increase from 2010. A few best-sellers in this category: contact lenses, eyeglasses, and hearing aids.

Photo Credit: Flickr/Lee J. Haywood

#9: Nondurable Medical Products

They may not last as long as their durable counterparts, but they did cost more in 2011. Nondurable medical products, such as over-the-counter medicines, medical instruments, and surgical dressings, cost the U.S. $47 billion in 2011. The spending rate remained unchanged from 2010 to 2011.

Photo Credit: Flickr/Andres Rueda

#8: Professional Services

When you get your eyes checked or your back cracked, those expenses get slotted as “professional services.” The U.S. spent $73.2 billion in 2011—a 4.9 percent increase—in this category. Besides optometry and chiropractic treatments, other professional services include physical therapy and podiatry. This section of healthcare spending saw slightly more growth since 2010, when it made up 4.6 percent of total healthcare spending.

Photo Credit: Flickr/Chris Schrier

#7: Home Healthcare

We’re spending more on home healthcare, which is no surprise given a large population—the Baby Boomers—are hitting retirement age. Spending in this category grew 4.5 percent, to $74.3 billion. Medicare and Medicaid are responsible for over 80 percent of home healthcare spending.

Many home healthcare workers are actually caregivers to their own relatives. According to the American Psychological Association (APA), family caregivers pay an estimated $2,400 in out-of-pocket expenses. Plus, they may require more medical attention themselves due to the physical and psychological stress that comes with the job, according to APA.

Photo Credit: Flickr/Sima Dimitric

#6: Dental Services

Over $108 billion may seem like a lot to spend on great smiles, but dental health is an important part of overall health (for one thing, gum disease has been linked to a higher rate of heart problems). Dental service costs are also on the rise: 2011’s $108.4 billion is a 3 percent increase over 2010. Many Americans, though, aren’t covered by dental insurance. If you’re one of those, you’re not alone: Nearly 40 percent of all dental spending is out-of-pocket, an increase of 4.1 percent since 2010.

Photo Credit: Flickr/Matt Lemmon

#5: Personal Care Services

Personal care services is a pretty broad category that includes schools, community centers, workplaces, ambulance providers, and residential mental health and substance abuse facilities. All told, these costs add up to just over $133 billion.

Compared to 2010, personal care services have dropped slightly, from 4.5 to 4.0 percent of total healthcare spending.

Photo Credit: Flickr/Terry Ross

#4: Nursing Homes

With a huge aging population in the U.S., the money we need to put towards nursing homes continues to rise. In 2011, spending for nursing care facilities and retirement communities increased 4.4 percent, to $149.3 billion, compared to a 3.2 percent increase in 2010.

Why? In 2011, Medicare spent a lot more—16.5 percent more—on skilled nursing facilitie to care for the influx of seniors needing more care.

Photo Credit: Wikimedia Commons

#3: Prescription Drugs

Drugs are expensive—this we already know. Retail prescriptions cost $263 billion in 2011—a 2.9 percent increase after a historically low 0.4 percent growth in 2010. The reason for the lag: slower growth in the number of prescriptions distributed, an increase in generic prescriptions, and the expiration of a number of patents for brand-name drugs.

Photo Credit: Flickr/The Javorac

#2: Physician and Clinical Services

We’re paying a lot to see the doctor, apparently. As a category, physician and clinical services reached $541.4 billion in 2011—a 4.3 percent increase following a historically low 2.5-percent growth in 2010. Not surprisingly, the two largest payers of physician and clinical services—Medicare and private health insurance—increased their spending in 2011 as well.

With the implementation of insurance exchanges coming out of the The Affordable Care Act, more newly insured Americans will likely spend more on physician and clinical services starting in early 2014, according to the American Medical Association.

Photo Credit: Flickr/Alex E. Proimos

#1: Hospital Care

The fact that hospital care tops the list of the single biggest expense in healthcare spending is probably not a surprise to anyone, but the amount of money spent is truly staggering: Hospital spending cost the U.S. $850.6 billion in 2011—a 4.3 percent increase since 2010.

While it eats up the largest portion of healthcare costs, hospital spending actually dropped by 0.4 percentage points compared to 2010. The slowdown is linked to lingering effects of the recession, when patients cut back on healthcare, according to The New York Times.

Photo Credit: Flickr/Bill McChesney

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The Breast Cancer Patient Protection Act would require health insurers to cover a hospital stay of at least 48 hours after a mastectomy. By signing the petition below, you'll be joining the Susan G. Komen Foundation, the General Federation of Women's Clubs and other top organizations in supporting the passage of this bill and telling top lawmakers in the House and Senate to prioritize women's health.

To:

John Boehner (R-OH), Speaker of the House

Eric Cantor (R-VA), House Majority Leader

Nancy Pelosi (D-CA), House Minority Leader

Harry Reid (D-NV), Senate Majority Leader

Mitch McConnell (R-KY), Senate Minority Leader

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Full Petition Text

Dear Members of Congress,

Over 75,000 women undergo mastectomies each year to treat breast cancer. Unfortunately, the majority of U.S. States still do not require insurance companies to provide more than 24 hours in the hospital, all too often resulting in "drive-thru mastectomies," that can leave patients woozy and in pain.

In the past two Congresses, bills have been introduced that would require insurers to cover a minimum of 48 hours in the hospital after a mastectomy or lumpectomy, but neither of these bills have made it to a vote in both houses.

I'm writing to ask you, on behalf of the hundreds of thousands of breast cancer patients and survivors across the United States, to make the Breast Cancer Patient Protection Act a priority in the 113th Congress. We shouldn't add to the suffering of thousands of survivors.

I urge you to take action immediately.

Sincerely,

[Your Name Here]

About The Petition

Over 75,000 women undergo mastectomies each year as a breast cancer treatment. It's a nervewracking procedure which can include a drowsy and painful recovery.

Unfortunately, many insurance companies do not cover overnight hospital care with mastectomies, and require patients to be discharged within 24 hours of admission. It's what's called a "drive-thru mastectomy," and it's a common practice throughout the United States.

In 2009, Rep. Rosa L. DeLauro (D-CT) introduced the Breast Cancer Patient Protection Act to the House. The act would require that insurers cover a minimum of 48 hours in the hospital after a mastectomy or lumpectomy, something already required by law in 20 states. The bill was referred to committee, and never saw a vote.

It was reintroduced as H.R. 111 in January 2011, but failed to make it out of committee. The Susan G. Komen Foundation, the General Federation of Women's Clubs, and other top organizations support the passage of this bill. This petition is a call to Congress to prioritize this bill as a necessary component of women's health in the 21st century.

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Paige Brettingen Paige Brettingen is a journalist in Los Angeles, where she is pursuing her masters at USC. When she's not on the lookout for the next story, her interests include running, walking with her dog, and attempting to be a better cook. Follow her @newsbypaige.