Infographics

NIHCM Policy Insights: Slowing Spending Growth in a High-Cost Era

Published on: June 16, 2026.

By: Melinda Buntin, PhD, Johns Hopkins University

NIHCM’s new Policy Insights initiative examines the drivers of rising US health care costs and the policy strategies to improve affordability by commissioning leading health policy scholars to produce original analyses and convening expert-level roundtables.

In the first of the series, Melinda Buntin, PhD, Johns Hopkins University, provides an original analysis on rising health care costs and potential solutions. Citations are available below each infographic panel.

Voters and policymakers are concerned about rising health care costs and affordability. Health care costs are a top economic concern among voters and federal and state officials are also challenged by rising costs.

Citations

Health care costs are rising, making affordability a top concern for Americans and placing increasing pressure on the health care sector: Shannon Schumacher et al., KFF, KFF Health Tracking Poll: Health Care Costs, Expiring ACA Tax Credits, and the 2026 Midterms, 2026

US health care spending surpassed $5 trillion in 2024: Shameek Rakshit et al., Peterson-KFF Health System Tracker, How has U.S. spending on healthcare changed over time?, 2026

Private health insurance makes up the largest share of expenditures, followed by Medicare and Medicaid/CHIP: Shameek Rakshit et al., Peterson-KFF Health System Tracker, How has U.S. spending on healthcare changed over time?, 2026

NOTE: CHIP refers to the Children's Health Insurance Program.

Health is the single largest federal budget category:

Medicare and Medicaid spending represented 24% of federal government spending in 2025: Congressional Budget Office, The Federal Budget in Fiscal Year 2025: An Infographic, 2026
Medicaid spending represented 31% of all state and local government spending in 2024: Congressional Budget Office, The Federal Budget in Fiscal Year 2024: An Infographic, 2025

The average annual growth rate in per-beneficiary spending slowed but has been increasing in recent years. We observe a U-shaped pattern of growth across all services and both payers, indicating that the slowdown in spending is not isolated to a type of service or payer. Despite the recent rise, however, note that the most recent period (2022 – 2024) still saw slower growth than the period 2000 – 2005, represented by the leftmost bar.

Citations

Health spending per Medicare beneficiary unexpectedly slowed for more than a decade: Centers for Medicare & Medicaid Services, Historical, National Health Expenditure Accounts, 2026

NOTE: Chart uses Centers for Medicare & Medicaid Services' data and author's projections.

We estimate the gap at $6.3 trillion between 2010 and 2024. Previous estimates have placed the gap between $3.9 trillion (2010 – 2023) and $6.7 trillion (2010 – 2024).

$3.9 trillion (2010 – 2023): Margot Sanger-Katz, Alicia Parlapiano, and Josh Katz, New York Times, The Upshot, A Huge Threat to the U.S. Budget Has Receded. And No One Is Sure Why., 2023
$6.7 trillion (2010 – 2024): David M Cutler and Lev Klarnet, The Brookings Institution, BPEA Conference Draft, March 26 – 27, Has the United States Bent the Health Care Cost Curve?, 2026

After years of slower growth, the average annual growth rate in per-beneficiary spending in Medicare and private insurance is increasing across all categories: Centers for Medicare & Medicaid Services, National Health Expenditure Data, 2025

Between 2022 and 2024, hospital spending accounted for 40% of the growth in national health spending, nearly twice the amount of growth attributed to physician and clinical services. Nonprice factors like use and intensity of services and demographic change drove the majority of health care cost growth in 2024, with 3.6 percentage points of growth attributable to nonprice factors and 2.5 percentage points attributable to growth in medical prices.

Citations

Hospital spending accounted for 40% of the growth in national health spending between 2022 and 2024: Jamie Godwin, Zachary Levinson, and Tricia Neuman, KFF, Hospital Spending Accounted for 40% of the Growth in National Health Spending Between 2022 and 2024, 2026

NOTE: The “All Other” category reflects other professional services, home health care, nursing care and continuing care retirement communities, dental services, government administration (Medicare, Medicaid, and the Children's Health Insurance Program), non-medical insurance expenditures (net cost of private insurance, or the difference between premiums incurred and spending on benefits), government public health activities, and all other as defined by the source (spending on residential care facilities, ambulance providers, care delivered in non-traditional settings, and certain Medicaid waiver programs for home or community care, as well as retail medical products, investment in non-commercial research, and spending on medical structures and equipment).

Nonprice Factors: Micah Hartman et al., Health Affairs, National Health Care Spending Increased 7.2 Percent In 2024 As Utilization Remained Elevated, 2026

While there is no silver bullet for reducing health care spending, attention to costs on the part of public and private payers, providers at risk in value-based care arrangements, and health care consumers can lead to lower spending growth. The programs and policies above, especially if implemented in a multi-payer arrangement, could help return health care cost growth to a lower trajectory.

Citations

Prior Authorization

Source 1: Wesam W Ismail, Matthew J Witry, and Julie M Urmie, Journal of Managed Care & Specialty Pharmacy, The association between cost sharing, prior authorization, and specialty drug utilization: A systematic review, 2023
Source 2: Zarek C. Brot-Goldberg et al., National Bureau of Economic Research, Rationing Medicine Through Bureaucracy: Authorization Restrictions in Medicare, 2023
Source 3: American Medical Association, 2024 AMA Prior Authorization Physician Survey, 2025

Enhanced primary care: Dilara Sonmez, George Weyer, and Daniel Adelman, JAMA Network Open, Primary Care Continuity, Frequency, and Regularity Associated With Medicare Savings, 2023

Reduced Administrative Burden

Source 1: Nikhil R Sahni et al., Health Affairs Scholar, Active steps to reduce administrative spending associated with financial transactions in US health care, 2023
Source 2: Sherry A Glied and Brendan Lui, Health Affairs, Anatomy Of A Slowdown: Decomposing The Moderation In Health Spending Growth, 2009–19, 2026

Enhanced Competition: Jessica Y Chang and Kathryn Martin, Health Affairs Scholar, Commercial inpatient hospital price growth driven by system affiliation and nonprofit-status hospitals, 2024

Price Transparency

Source 1: Angela Zhang et al., Health Policy, The impact of price transparency on consumers and providers: A scoping review, 2020
Source 2: Sherry Glied, JAMA, Price Transparency–Promise and Peril, 2021

Alternative Payment Models: Evidence that alternative payment models produce savings, those savings increase over time, and focus on value has had system-wide effects on cost growth.

Source 1: Melinda B Buntin, Ellen Meara, and Carrie H Colla, The New England Journal of Medicine, The Value Zeitgeist — Considering the Slowdown in Health Care Spending Growth, 2025
Source 2: Dhruv Khullar et al., JAMA Health Forum, Budgetary Impact of the Medicare Shared Savings Program on Traditional Medicare, 2026
Source 3: Assistant Secretary for Planning and Evaluation Office of Health Policy, The Impact of Alternative Payment Models on Medicare Spending and Quality, 2012‐2022, 2025
Source 4: Aidan P Crowley et al., JAMA Health Forum, Physician and Hospital Performance in Medicare’s Updated Bundled-Payment Model for Joint Replacement, 2025

Site-Neutral Payments: Johns Hopkins University Center for Health Systems and Policy Modeling, Site-Neutral Payment for Ambulatory Care: A Medicare Policy Framework, 2025

NOTE: OPPS refers to Outpatient Prospective Payment System, and PFS refers to Physician Fee Schedule.

Targeted Care Coordination: Marc N. Elliot et al., Journal of General Internal Medicine, Patient-Reported Care Coordination is Associated with Better Performance on Clinical Care Measures, 2021

Price Regulation: Increasing state interest in price regulation.

Source 1: Georgetown University McCourt School of Public Policy, Center on Health Insurance Reforms, Hospital Price Regulations, 2025
Source 2: National Academy for State Health Policy, 2025 State Legislation to Lower Health System Costs, 2025

Negotiated Networks & Discounts: Similarity of insurer rates and cash prices for hospital services shows limits of negotiation. Narrower physician and hospital networks are associated with lower premiums

Source 1: Yang Wang et al., Health Affairs, The Relationships Among Cash Prices, Negotiated Rates, And Chargemaster Prices For Shoppable Hospital Services, 2023
Source 2: Daniel Polsky and Bingxiao Wu, Health Services, Research, Provider networks and health plan premium variation, 2020

Artificial intelligence

Source 1: Paige Nong and Hannah T Neprash, JAMA Health Forum, Unintended Consequences of Using Ambient Artificial Intelligence Scribes for Billing, 2026
Source 2: Pragya Kakani, Austin S Kilaru, and Melinda Buntin, JAMA Health Forum, Implications of Artificial Intelligence–Powered Ambient Scribes, 2026
Source 3: Aaron A Tierney et al., NEJM Catalyst Innovations in Care Delivery, Ambient Artificial Intelligence Scribes: Learnings after 1 Year and over 2.5 Million Uses, 2025

Interoperable Health Records: US Centers for Medicare & Medicaid Services, Interoperability Framework, 2025

This infographic features an original analysis by Melinda Buntin, PhD, Johns Hopkins University. Special thanks to Jordan Phan, Johns Hopkins University, and Caitlin Ellis, NIHCM, for their assistance developing the infographic.