AMA Report: Elevated Healthcare Spending Driven by Increased Utilization

July 16, 2026

The United States spent a total of $5,278.6 billion, or $15,474 per capita, on healthcare in 2024, according to a new AMA Policy Research Perspectives. AMA gleaned the numbers from data released by the Centers for Medicare & Medicaid Services (CMS) this past January. 

Healthcare spending accounted for 18.0% of gross domestic product (GDP) in 2024, similar to the shares observed over the past decade, except for the brief uptick in 2020 due to the COVID-19 pandemic (19.7% of GDP). Healthcare spending grew by 7.2% in 2024, closely matching the 7.4% growth seen in 2023, and outpacing the 2022 and 2021 growth rates of 4.8% and 4.1%, respectively. 

Apart from the 10.5% surge in 2020 because of the pandemic, the 2023 and 2024 growth rates are the highest recorded since 2003 (8.6%). Similar to 2023, the acceleration in 2024 stemmed from higher demand for healthcare goods and services. For the second year in a row, the growth in spending (7.2%) outpaced GDP growth (5.3%). 

In 2024, personal healthcare spending accounted for 85.4% ($4,510.2 billion) of total healthcare spending. The four largest components in this category were spending on hospital care (31.0% or $1,634.7 billion), physician services (15.7% or $829.0 billion), prescription drugs (8.8% or $467.0 billion), and clinical services (5.3% or $280.7 billion). Driven by increased utilization of healthcare goods and services, personal healthcare spending grew by 8.3% in 2024—following a 9.4% surge in 2023, the highest growth rate since 1990. 

Among different payers of healthcare, private health insurance spending saw the largest growth in 2024 at 8.8%, driven by increased healthcare utilization and considerable rise in Health Insurance Marketplace plan enrollment resulting from enhanced premium tax credits.  

In contrast, Medicaid spending decelerated considerably in 2024, growing by only 6.6% in 2024 after reaching 9.7% growth in 2022 and 2021, as pandemic-era coverage protections ended, and states resumed eligibility redetermination. Although Medicare spending also slowed slightly in 2024 due to the lower benchmark payment rates to Medicare private plans, Medicare fee-for-service spending accelerated notably despite a sixth consecutive year of declining enrollment. Out-of-pocket spending surged in 2021, rising by 10.9%, before decelerating to 5.9% in 2024. 

In 2024, the federal government was the largest sponsor of national healthcare spending, financing 31.3% ($1,652.0 billion). Households financed 27.6% ($1,458.9 billion), while private businesses and state and local governments sponsored 18.3% ($967.4 billion) and 16.3% ($859.7 billion), respectively. The remaining share (6.5% or $340.5 billion) came from other private sponsors.