The health care payments market is big – accounting for over one in six dollars of the U.S. GDP – yet it remains perpetually outdated with its heavy reliance on using paper statements for sending out bills.
In an age where consumers can use mobile phones for metro transit rides, order ahead coffee and digital person-to-person payments, it seems strange to be writing a paper check and mailing it to pay a doctor’s bill.
According to the U.S. government agency Centers for Medicare and Medicaid Services (CMS), the total amount spent on health care payments in 2017 by consumers, businesses and the government was $3.5 trillion — or $10,739 per person and — accounted for 17.9% of the GDP.
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The CMS projects that health care spending will grow at an average rate of 5.5% per year between 2018-2027. It also predicts health care payments in 2027 will amount to nearly $6 trillion and will account for 19.4% of GDP, up 1.5 percentage points from 2017.
Federal, state and local governments make almost half (45%) of all health care payments. Data from the CMS also reveals that households have a heavier burden than businesses since they make 28% of all payments vs. just 20% for companies.
Health care spending per person was the highest for seniors (65 and older) at $19,098 in 2014. In fact, seniors account for only 15% of the population yet make 34% of health care payments. In comparison, spending per child in 2014 was $3,749 and for a working age person it was $7,153.
Date: August 12, 2019
Source: Payments Source