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U.S. spends more on SNF, CCRC care, but home healthcare spending growing faster: report

January 7, 2014
by Lois A. Bowers, Senior Editor
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The United States spends more money for care provided at skilled nursing facilities (SNFs) and continuing care retirement communities (CCRCs) than for care provided through home healthcare agencies, according to a new report, but spending for home healthcare is growing at a faster rate.

Spending for freestanding nursing care facilities and CCRCs was $151.5 billion in 2012, according to the report, from the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary. By contrast, spending for home healthcare agencies was $77.8 billion in 2012.

The SNF/CCRC change represents a smaller increase for 2012 (1.6 percent) than the increase in 2011 (4.3 percent), the agency says, adding that the growth slowdown mainly was due to a one-time Medicare rate adjustment for SNFs.

Meanwhile, spending growth for freestanding home healthcare agencies was 5.1 percent following an increase of 4.1 percent in 2011, according to the report. Medicare and Medicaid spending accounted for about 81 percent of total home healthcare spending in 2012. Medicare spending for home healthcare grew at a faster rate in 2012, whereas Medicaid spending slowed.

Five percent of the $2.8 trillion spent on healthcare in 2012 went toward care provided in SNFs and CCRCs, according to CMS (click on the graphic, upper left, for details). Spending on home healthcare—together with spending on other health, residential and personal care (including residential care facilities, senior centers and more); government public health activities; and other medical products—represents 14 percent of the $2.8 trillion total.


Overall national health expenditures grew at an annual rate of 3.7 percent in 2012, marking the fourth consecutive year of low growth, CMS said. Health spending as a share of gross domestic product fell slightly from 17.3 percent in 2011 to 17.2 percent in 2012.

The Partnership for Quality Home Healthcare warns that the low growth rate comes with the cost of "deep Medicare cuts" of 3.5 percent annually that began Jan. 1 and will be imposed through 2017, affecting home healthcare. CMS "concedes that these deep cuts will leave 'approximately 40 percent' of all home health providers with negative margins by CY 2017," the organization says.

The CMS report also finds that:

  • Medicare spending growth slowed slightly in 2012, increasing 4.8 percent compared with 5.0 percent growth in 2011. This low growth occurred despite a large increase in Medicare enrollment, the agency said. Total Medicare spending per enrollee grew by only 0.7 percent in 2012.
  • Total Medicaid spending grew 3.3 percent in 2012, “a historically low rate.”

The report also details spending related to private health insurance and prescription drugs.

The CMS information comes on the heels of a report issued by the Organization for Economic Cooperation and Development (OECD), a Paris-based group promoting policies to improve the economic and social well-being of people around the world. That report found that the United States spends 2.5 times more per capita on healthcare than the average of OECD countries—and 50 percent more than Norway and Switzerland, the countries that spend the most after the United States—but does not see the lower mortality rates and higher life expectancy rates typically associated with such spending.

See other content by this author here.