Health care costs keep climbing — hospital spending is a big reason why

American’s health care spending reached $5.3 trillion in 2024, rising 7.2% from the year before. The growth once again outpaced the broader economy, continuing a trend that puts pressure on household budgets across the country.

The increase is not driven by prices alone. Americans are using more health care, and hospital services account for the largest share of the growth.

Hospital spending rose nearly 9% in 2024, making it the biggest contributor to overall health care cost increases. More inpatient stays, outpatient procedures and intensive treatments are driving higher spending. For families, this often shows up as higher insurance premiums, larger deductibles, and rising out-of-pocket costs.

Spending on physician and clinical services also increased, reflecting more doctor visits and medical procedures. Prescription drug spending continued to grow as well, fueled in part by wider use of newer, high-cost medications.

The data come from a new analysis by the Centers for Medicare & Medicaid Services and reported by Healthcare Dive. They highlight a familiar problem: access to care may be improving, but affordability is not.

Health care now accounts for nearly 18% of the U.S. economy — almost one out of every five dollars spent. Meanwhile, wages have not kept pace, and many families report that health care costs rival or exceed expenses like rent, groceries, or childcare.

Have your health care costs increased? Which areas have you noticed the most? Share your thoughts with Voices for Affordable Health