Becker's Hospital Review

42 CFO / FINANCE 7 Healthcare Takeaways From the CBO Annual Budget Outlook By Ayla Ellison T he Congressional Budget Office released its annual budget out- look in January, which shows Medicare, Social Security and other health spending will be responsible for a large chunk of the projected $2.6 trillion growth in annual spending between 2017 and 2027. Here are seven major healthcare takeaways from the CBO's budget outlook. 1. e CBO said Medicare spending rose by about $26 billion, or 5 percent, in 2016. Much of the growth was due to increased spending per person on prescription drugs. 2. Spending on prescription drugs climbed about 15 percent last year. "Much of that increase stemmed from spending for people whose out- of-pocket costs for prescription drugs exceeded the catastrophic limit on such spending," according to the CBO. 3. Medicaid spending increased by $19 billion, or 5 percent, in 2016 — about one-third of the growth rate recorded in 2015. Medicaid ex- pansion under the ACA has been in place for two years, and rapid enrollment growth that initially occurred began to moderate in 2016, according to the CBO. 4. Federal spending for people made eligible for Medicaid under the ACA is projected to be roughly $70 billion, or 0.4 percent of gross domestic product, in fiscal year 2017. That spending is ex- pected to rise 7 percent to $142 billion, or 0.5 percent of GDP, in 2027. 5. e CBO projects annual federal spending will rise by $2.6 trillion over the next decade. Social Security, Medicare and net interest on the federal debt will account for 70 percent of the total $2.6 trillion increase in outlays. 6. Much of the projected growth in Social Security and Medicare spending are attributable to the aging of the population. e CBO projects spending for Social Security and Medicare for people age 65 or older will increase from about one-third of all federal noninterest spending in 2017 to roughly 42 percent in 2027. 7. e CBO noted that its projections were completed before the new administration took office Jan. 20 and do not incorporate the effects of executive orders or other actions taken by the new administration. n Being successful in healthcare today means being prepared for constant change. It means seeing next steps before the shifts occur. Tea Leaves Health delivers business intelligence solutions for the healthcare industry, bringing clarity to chaos and highlighting the trends and insights your data reveals. We drive service-line and strategic growth through: ■ True market analysis ■ Marketing automation ■ Physician relations management ■ Reliable results measurement ■ Robust forecasting ■ Unparalleled data Know Your Story from Start to Finish. Simply Read the Tea Leaves. Learn more at tealeaveshealth.com

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