Health Insurance

Medical Spending Increased 14% Between 2016 and 2019, Topping $3 Trillion for First Time

The prevalence of most medical conditions is also increasing, as well as the cost of treatment.
Prescription medicine and money.
Prescription medicine and money. Source: Getty Images

The COVID-19 pandemic may have brought more attention than ever to the value of medical treatment, but according to the latest ValuePenguin study, medical spending has been rising for some time.

Analyzing U.S. Bureau of Economic Analysis (BEA) Health Care Satellite Account data, ValuePenguin researchers found that medical spending increased by 14.3% between 2016 and 2019. ValuePenguin health care expert Robin Townsend says consumers feel the burden of increased health care spending in more ways than one.

"More costs — including drugs and administrative services — are shifting back to the consumer in the form of higher premiums, copays and deductibles," Townsend says. "Since salary growth isn’t keeping up with rising health care expenses, some consumers accrue medical debt. These financial burdens cause people to delay or skip medical treatment, raising health care expenses."

Key findings

  • Health care spending increased from $2.69 trillion to $3.07 trillion between 2016 and 2019 — an increase of 14.3%. Spending increased the most (29.4%) on mental illness, jumping from $104.0 billion to $134.6 billion. Following that was spending on neoplasms (22.8%).
  • The costs and prevalence of most medical conditions are rising, led by influenza. While all but six medical conditions tracked have seen increases in the cost per case and number of events in the same 2016-to-2019 period, influenza ranked highest for both. Flu treatment costs and the number of flu diagnoses increased by 120.4% and 121.3%, respectively.
  • Not all medical increases are necessarily related to conditions. Spending on administrative and social admission, for example, increased 24.2% between 2016 and 2019 and 15.8% on a per-case basis. Additionally, pharmaceutical products (excluding prescription drugs) notably increased by 12.7%.
  • 6 of the 61 medical conditions analyzed saw spending go down in the analyzed period. Spending on comas and brain damage fell by 14.5% between 2016 and 2019, ranking it lowest overall. Following that, spending on hyperlipidemia (high cholesterol) decreased by 9.4% and poisoning by 7.8%.

Health care spending increased by 14.3% between 2016 and 2019

Health care spending reached $3 trillion for the first time in 2019 — the latest available data — accounting for 14.3% of the U.S. gross domestic product (GDP). That’s up from $2.69 trillion in 2016.

Health care spending (2016 to 2019)

% increase
$2.69 trillion$2.80 trillion$2.92 trillion$3.07 trillion14.3%

Source: ValuePenguin analysis of U.S. Bureau of Economic Analysis (BEA) Health Care Satellite Account data

Spending on disease-related medical services rose 14.9%. Within this category, spending increased the most for mental illness services, jumping from $104.0 billion in 2016 to $134.6 billion in 2019. That’s an increase of 29.4%.

Spending on disease-related medical services (2016 to 2019)

Service type
% increase
Medical services by disease$2.25 trillion$2.35 trillion$2.45 trillion$2.59 trillion14.9%
Mental illness$104.0 billion$114.5 billion$122.0 billion$134.6 billion29.4%
Neoplasms$138.2 billion$145.4 billion$155.9 billion$169.6 billion22.8%
Infectious and parasitic diseases$120.2 billion$126.4 billion$135.3 billion$143.0 billion19.0%
Endocrine, nutritional and metabolic diseases and immunity disorders$154.1 billion$160.8 billion$170.4 billion$182.3 billion18.3%
Diseases of the nervous system and sense organs$178.1 billion$187.0 billion$196.3 billion$207.3 billion16.4%
Symptoms, signs and ill-defined conditions$319.0 billion$338.2 billion$350.5 billion$365.9 billion14.7%
Diseases of the circulatory system$254.2 billion$260.5 billion$272.8 billion$291.4 billion14.6%
Diseases of the skin and subcutaneous organs$59.6 billion$61.8 billion$64.4 billion$68.0 billion14.1%
Diseases of the digestive system$122.8 billion$126.5 billion$132.7 billion$138.9 billion13.1%
Diseases of the respiratory system$173.0 billion$180.7 billion$185.8 billion$192.8 billion11.4%
Diseases of the genitourinary system$119.1 billion$121.0 billion$126.3 billion$132.3 billion11.1%
Show All Rows

Source: ValuePenguin analysis of U.S. BEA Health Care Satellite Account data

According to Townsend, insurance plans likely play a role in rising health care costs, particularly for mental illness services. A lack of plan choices prevents competition between insurers and ultimately drives prices higher.

Accessing mental health care is historically difficult, particularly as the U.S. is experiencing a shortage of mental health professionals predicted to last through 2025. Overall, just 28.1% of Americans live in areas with enough mental health services to meet needs, with the lowest-ranking states meeting 10% or less of their residents’ mental health needs, according to 2021 data from the U.S. Health Resources and Services Administration.

Despite policies aimed at increasing mental health service access for Americans who rely on government-sponsored plans, Medicare coverage for serious mental illnesses is limited compared to Medicaid plans. Medicare also doesn’t reimburse licensed professional counselors. To make matters worse, psychiatrists are increasingly less likely to accept any insurance than other physician specialties.

Spending for neoplasms ranked second within the disease-related medical services category, with an increase of 22.8% between 2016 and 2019. Neoplasms, or abnormal masses of tissue, include benign (not cancerous) and malignant (cancerous) diagnoses.

Cancer ranks higher for spending overall than non-malignant neoplasms, coming in seventh for cost per case (22.7%) and number of episodes (23.2%). While Centers for Disease Control and Prevention (CDC) data on cancer trends reveal that cancer rates are dropping, the number of new cases and deaths are going up. This is possible because the population of older Americans is rapidly increasing. According to the U.S. Census Bureau, those 65 and older — the age group most at risk for the majority of cancers — grew in population by over a third during the past decade and by 3.2% from 2018 to 2019.

Beyond disease-related medical services, however, spending is up for provider-related medical services, too. Overall, spending rose 10.5% for this type of health service, though a further breakdown reveals that dental services rose 14.0% and nursing home services rose 8.2%.

Spending on medical provider services (2016 to 2019)

Service type
% increase
Medical services by provider$302.1 billion$310.0 billion$321.0 billion$333.9 billion10.5%
Dental services$122.6 billion$127.5 billion$133.9 billion$139.7 billion14.0%
Nursing homes$179.5 billion$182.5 billion$187.1 billion$194.2 billion8.2%

Source: ValuePenguin analysis of U.S. BEA Health Care Satellite Account data

Costs and prevalence of most medical conditions are rising, led by influenza

In total, all but six medical conditions tracked have seen an increase in costs per case and the number of episodes. Generally, cost per case and prevalence of cases is rising the most for medical conditions within the categories with the most prominent rise in spending.

While infectious and parasitic diseases ranked third for the category with the biggest jump in disease-related medical spending (19.0%), influenza saw the biggest increase in spending for any medical condition. Overall, spending on the flu increased 124.1% between 2016 and 2019.

This comes as the flu tops the list for both the cost of treatment and the number of episodes over any other medical condition. Between 2016 and 2019, the cost of treating the flu increased by 120.4% and the number of flu episodes increased by 121.3%.

Following that, cases with no diagnosis saw the highest increase in the cost of treatment and number of episodes, around 48% to 49% for both.

Full rankings: Medical conditions by percentage increase in the number of episodes

2016 episodes
2017 episodes
2018 episodes
2019 episodes
% increase
Influenza2.1 billion3.9 billion5.7 billion4.7 billion121.3%
No diagnosis271.7 million290.3 million286.4 million402.4 million48.1%
Other stomach and intestinal disorders20.3 billion22.1 billion25.1 billion26.4 billion30.5%
Mental disorders83.3 billion91.6 billion99.6 billion106.4 billion27.8%
Hypertension43.2 billion50.1 billion53.5 billion54.2 billion25.4%
Diabetes mellitus56.8 billion60.3 billion66.8 billion71.2 billion25.3%
Cancer90.7 billion96.0 billion105.3 billion111.7 billion23.2%
Other endocrine, nutritional and immune disorder36.4 billion39.4 billion42.4 billion43.6 billion19.6%
Cerebrovascular disease21.6 billion22.0 billion23.5 billion25.8 billion19.2%
Allergic reactions9.0 billion9.4 billion10.0 billion10.6 billion18.9%
Hereditary, degenerative and other nervous system disorders19.2 billion21.0 billion22.4 billion22.6 billion17.5%
Other CNS disorders45.4 billion48.0 billion51.9 billion53.2 billion17.0%
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Source: ValuePenguin analysis of U.S. BEA Health Care Satellite Account data. While numbers are presented with one decimal for display, calculations were done based on complete figures.

Full rankings: Medical conditions by percentage increase in the cost per case

2016 cost per case
2017 cost per case
2018 cost per case
2019 cost per case
% increase
No diagnosis$1.05$1.12$1.08$1.5648.6%
Other stomach and intestinal disorders$78.62$85.37$94.46$102.1629.9%
Mental disorders$323.11$353.64$374.88$411.4427.3%
Diabetes mellitus$220.36$232.82$251.73$275.0924.8%
Other endocrine, nutritional and immune disorder$141.39$151.90$159.68$168.4319.1%
Cerebrovascular disease$83.83$85.05$88.52$99.5618.8%
Allergic reactions$34.66$36.46$37.74$41.0418.4%
Hereditary, degenerative and other nervous system disorders$74.46$81.17$84.48$87.1717.1%
Other CNS disorders$176.33$185.08$195.48$205.5716.6%
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Source: ValuePenguin analysis of U.S. BEA Health Care Satellite Account data

Administrative and social admissions spending also rising

Spending on administrative and social admissions, or hospital admissions related to a patient’s social circumstances rather than an acute medical condition, has also risen by 24.2%. Additionally, the cost per case has risen from $543 to $629. That’s an increase of 15.8%.

Cost of administrative and social admissions by year

Cost per case
Total spending
2016$543.16$13.4 billion
2017$565.45$14.8 billion
2018$577.80$16.3 billion
2019$628.87$16.6 billion

Source: ValuePenguin analysis of U.S. BEA Health Care Satellite Account data

These patients are typically older and suffer from progressing illnesses, disabilities or general health declines. These patients are usually admitted after their family members or another informal caregiver can no longer safely meet their care needs. However, as the cost of treating administrative and social admission cases continues to rise alongside the rising costs of treatment for most medical conditions, informal caregivers may risk providing inefficient care to avoid overwhelming medical bills.

One reason administrative and social admission costs have risen may be because the cost of operating a hospital is also rising. Hospitals, physicians and clinics and administration costs often make up more than half of the total health care spending — according to 2019 data from the National Health Expenditure Accounts of the Centers for Medicare & Medicaid Services — a trend that’s continued as health care spending rose.

Spending on pharmaceutical products, therapeutic appliances also rising

Beyond just the cost of medical treatments by disease or provider, medical spending is also on the rise in categories that affect a consumer’s everyday life. In particular, the cost of pharmaceutical and other medical products has risen by 12.8%. Within this category, spending on pharmaceutical products (excluding prescription drugs) has risen by 12.7%, and spending on all other medical products has risen by 14.4%.

Spending on pharmaceutical and other medical products (2016 to 2019)

Service type
% increase
Pharmaceutical and other medical products$71.9 billion$74.5 billion$77.5 billion$81.1 billion12.8%
Other medical products$5.6 billion$5.8 billion$6.1 billion$6.4 billion14.4%
Pharmaceutical products (without prescription drugs)$66.2 billion$68.7 billion$71.4 billion$74.7 billion12.7%

Source: ValuePenguin analysis of U.S. BEA Health Care Satellite Account data

That’s not the only way spending has affected consumers at the pharmacy. As a stand-alone category, spending on nonprescription drugs has risen by 12.7% too.

Additionally, spending on therapeutic appliances and equipment has risen by 12.6%. That’s led by therapeutic medical equipment — such as hearing aids, prosthetics, wheelchairs and other products designed to support consumers — with an increase of 14.3%. Following that, spending on corrective eyeglasses and lenses has risen by 11.1%.

Spending for therapeutic appliances and equipment (2016 to 2019)

Service type
% increase
Therapeutic appliances and equipment$63.7 billion$65.6 billion$68.6 billion$72.0 billion12.6%
Therapeutic medical equipment$29.0 billion$30.0 billion$31.5 billion$33.1 billion14.3%
Corrective eyeglasses and contact lenses$34.7 billion$35.6 billion$37.1 billion$38.5 billion11.1%

Source: ValuePenguin analysis of U.S. BEA Health Care Satellite Account data

Separately, national health expenditure (NHE) estimates for medical equipment — which largely tracks the same products as those in the therapeutic appliances and equipment category — indicate that spending in this category has risen 12.7%. While it’s only a 10th of a percentage point difference, medical equipment spending is much higher than therapeutic appliance and equipment spending. In 2019, medical equipment spending was $152.8 billion, while therapeutic appliance and equipment spending was $72.0 billion.

Most of the discrepancy is due to how the BEA tracks each category. The BEA tracks therapeutic appliances through personal consumption expenditure (PCE) estimates, which includes receipts from optometrists. The NHE estimates, on the other hand, don’t include optometrists’ sales of optical goods and classifies optometrists’ services with other professional services.

Spending decreased in 6 medical categories

Still, spending isn’t on the rise for every medical condition. In fact, spending decreased for six categories between 2016 and 2019, leading with coma and brain damage (14.5%). That’s followed by:

  • Hyperlipidemia (high cholesterol) (9.4%)
  • Poisoning by medical and non-medical substances (7.8%)
  • Intestinal infection (3.7%)
  • Pneumonia (1.4%)
  • Normal birth (1.2%)

These six categories also rank lowest for the percentage change in frequency and cost per case, which likely accounts for the overall decrease in spending. Coma and brain damage ranks lowest for both, with decreases of around 16%. That’s followed by:

  • Hyperlipidemia (high cholesterol): 10.8% decrease in cost per case, 10.5% decrease in frequency
  • Poisoning by medical and non-medical substances: Around 9% decreases in both frequency and cost per case
  • Intestinal infection: Around 5% decreases in both frequency and cost per case
  • Pneumonia: Around 3% decreases in both frequency and cost per case
  • Normal birth: 2.8% decrease in cost per case, 2.4% decrease in frequency

One reason comas and brain damage may have decreased so significantly may be because of the research initiatives in place to treat traumatic brain injuries, including developing new diagnostic and prognostic tools.

Additionally, early prevention may play a role in the decreasing prevalence and cost of high cholesterol. About two-thirds of U.S. adults say they have had their cholesterol checked within the past five years, according to the CDC, which enables health care professionals to detect early cholesterol abnormalities and treat them before they become more severe.

How medical spending impacts consumers — and what you can do about it

As health care spending increases, the cost to cover those services also rises. As a result, Medicare and other health insurance rates increase almost yearly to account for growing health care prices and needs.

Townsend believes health care costs will only continue to rise — and if they do, she estimates that consumer costs will grow, too.

"If current trends continue, consumer out-of-pocket health costs could grow by about 10% per year for the next five years," she says.

Some recent legislation may help relieve consumers of medical costs. The No Surprises Act, which went into effect Jan. 1, 2022, protects consumers from surprise medical bills, which would help to curtail medical spending. Additionally, the Elijah E. Cummings Lower Drug Costs Now Act would cap drug prices and allow Medicare to negotiate costs. This bill was introduced in April 2021 and is under review.

To battle high health care costs now, however, Townsend recommends considering high-deductible health plans. These plans can help keep overall insurance rates down as consumers share a larger portion of the cost of their care. Health insurance costs can also be held in check by taking more generic and over-the-counter medications and increasing the use of disease management programs.


Analysts compared data from 2016 and 2019 (the latest available) to estimate where medical spending has increased the most.

Specifically, researchers looked at data from the U.S. Bureau of Economic Analysis (BEA) Health Care Satellite Account and compared the total cost, cost per case and number of episodes across 61 disease categories. We ranked them according to the overall percentage change between 2016 and 2019.