2024 - Health of Health Index

2024 Report

Introduction

Over the past few years, through the Health of Health report, our analysis of 2021 and 2022 data for the Health Ecosystem Index focused on understanding the trauma and disruption COVID-19 inflicted on our healthcare system. Now, as we examine 2023 data—and incorporate 2024 data as it becomes available—we assess the healthcare system in what can be considered a “post-COVID era,” reflecting on the system’s recovery, adaptation, and signs of re-normalization.

The data continues to reinforce deeply concerning trends. US health outcomes, such as age expectancy and maternal mortality rate, remain below those of peer high-income nations despite per capita healthcare spending almost twice as high as the comparable country average.¹ Labor challenges, including persistent workforce shortages and widespread burnout, are placing significant strain on system capacity to treat patients and research new solutions to conditions.

Yet, amid these challenges, we are also seeing encouraging signs of transformation. There is momentum behind the shift toward more ambulatory and at-home care models, continued investment in digital health and automated solutions, and innovations in prescription drugs and medical equipment.

In the 2024 report, we conducted deeper dives into specific topic areas to illuminate systemic challenges and areas of promise. One thing is clear: building a resilient, affordable, and high-quality healthcare system is neither a guaranteed outcome of market forces nor a foregone result of government intervention alone. It will require bold leadership, cross-sector alignment, and sustained collaboration.

We are hopeful this index and accompanying commentary will catalyze dialogue among stakeholders and spark the thoughtful, mission-driven action needed to shape the future of healthcare.

Chan Harjivan, Dr. Anjali Kastorf, and Kyle Johnson

Partners at Rios Partners

Executive Summary

Rios Partners’ Health of Health report aims to provide a holistic assessment of the US health ecosystem. The 2024 edition takes advantage of trusted data sources to assess the state of US healthcare through four pillars:

Patients – Representing the demand side of healthcare, this pillar includes metrics measuring the treatment individuals receive (or do not receive) and their associated health outcomes.
Providers – Representing the supply side of healthcare, this pillar includes metrics measuring healthcare’s human resources and physical infrastructure.
Payers – Representing the funding structures of the healthcare system, this pillar includes metrics measuring the cost of healthcare and who pays for it.
R&D – Representing innovations in biotechnology and pharmaceuticals, this pillar includes metrics measuring investment in new technologies and actions taken to improve healthcare delivery.

To do this, we built an integrated set of metrics – the Health Ecosystem Index. This simple index aims to provide a holistic overview of the current state of American healthcare, track changes in health over time, and help identify areas where interventions are needed, as well as the effectiveness of interventions over time. The index has a standard set of metrics that we review year over year. We also ad-hoc rotate in new metrics to complement a specific year’s analysis if it will shed further light on a theme or topic we are exploring.

Accordingly, in addition to analyzing each pillar individually, the Health of Health report also assesses the interconnectedness of all pillars and conducts an in-depth exploration of specific topic areas to identify key intersections, uncover shortcomings, and highlight opportunities within the ecosystem. The 2024 report has focused in on three topics we believe are existential for the “health” of the healthcare system: the pharmaceutical supply chain; administrative burden on the healthcare provider system; and Medicare and Medicaid expenditure growth in select areas. We believe in in-depth discussions on these topics will focus stakeholders on conversations that matter and mobilize action.

It is important to note that while this is the 2024 report, most available data referenced in this report reflects trends only through 2023. This is primarily due to the lag in public health data reporting, as most federal and state datasets require extensive collection, validation, and publication time before release. Despite this, our analysis for the 2024 report reflects updated data from our 2023 report which mainly leveraged data through 2022.

Patient

Signs of post-pandemic recovery have emerged, yet long-standing health challenges, particularly in mental health and chronic diseases, remain unresolved.

The Patient pillar captures the demand side of healthcare—measuring overall population health, care engagement, and the shifting behaviors and outcomes of patients. While several indicators show encouraging movement through the end of 2023, the most recent data stops short of capturing whether early improvements have held in 2024 or 2025. Persistent gaps in mental health, early-life outcomes, and equitable access underscore the need for continued reform.

Health Outcomes

Life expectancy rebounded to pre-pandemic levels, rising by approximately 1.2% from 2022 to 2023.² These gains are potentially driven by a 70% drop in COVID-19 deaths and a 6% decline in overall mortality.³⁴ Though this recovery is notable, it comes after a period of significant loss and remains vulnerable to broader public health trends. Life expectancy dips during the pandemic hit the US harder than comparable countries: US average life expectancy dipped by 1.8 years from 2019 to 2020 (versus 0.6 years in comparable countries) and fell a further 0.6 years in 2021 (versus a 0.2-year improvement in comparable countries).⁵ The sustained impact of COVID-19 in the US compared to other peer countries signals lagging improvements to health outcomes when responding to new health-related threats.

Life expectancy isn’t the same for all demographic groups in the US and the disparity is growing. The gap between the racial and geographical demographic categories of Americans with the lowest and highest life expectancy grew from 15.8 years in 2019 to 20.4 years in 2021, with the lowest group comprised of non-Latino American Indian or Alaska Natives living the in the non-coastal American West.⁶

One contributing factor to lower US life expectancy is high rates of maternal mortality compared to peer countries. However, recent US rates have improved, falling nearly 50% from 2021 to 2023.⁷ One likely contributor was the implementation of extended Medicaid postpartum coverage under the American Rescue Plan Act enacted in 2022, which changed the standard coverage period from 60 days to 12 months after childbirth.⁸ This shift allowed states to provide continuous coverage for a full year postpartum, improving access to critical follow-up care during the high-risk postpartum period.

In contrast, infant mortality held steady at 5.61 per 1,000 live births during this period and the lack of new national initiatives specifically targeting infant mortality may have contributed to the plateau in early-childhood health outcomes.⁹ Experts caution that without systemic improvements in care coordination and post-natal support, these gains may not be sustained.¹⁰

Even with improvements in maternal mortality, childbirth isn’t equally as safe across the US. Giving birth in Tennessee is four times as deadly as giving birth in California (41.1 deaths per 100,000 births in TN versus 10.5 in CA, as of 2022).¹¹ This disparity isn’t as simple as the number of providers: Tennessee had more hospital beds per capita than California and a similar number of women’s health providers per capita.¹² ¹³ The answer lies more in the prevalence of maternal risk factors. Twice as many deaths per capita are due to drug overdose in Tennessee than in California, and 34% of all pregnancy-associated deaths in Tennessee were attributed to overdoses.¹⁴ ¹⁵This example shows how health outcome measures don’t always point to obvious root causes and, if left unexplored, can cause misplaced assumptions.

Health-related causes of death outside of COVID-19 haven’t changed much from pre-pandemic rates.¹⁶ One promising trend is a consecutive decrease is diabetes-related deaths since 2021, demonstrating the potential early impacts of insulin price cap efforts by the last two administrations to increase access to disease-managing medication.

Managing chronic conditions like diabetes are becoming more prevalent in the US. In the last decade, the percentage of US adults managing at least one chronic condition increased by 5.6%, reaching 76.4% of adults in 2023.¹⁷ 32.7% of American adults are now obese (up from 28.3% in 2013) and 20.2% are diagnosed with clinical depression (up from 17.7% in 2013), highlighting the need for professional services like mental health and nutrition to be further integrated into health care delivery.

Table 1. Health Outcomes Metrics

Trending	Metric	Description
	Patient 1. Life expectancy at birth	US life expectancy has rebounded to pre-pandemic levels in 2023 after declining in 2020 and 2021 due to the COVID-19 pandemic.¹However, the US life expectancy of 78.4 years is over 4 years shorter the comparable country average (82.5 years). ²
	Patient 2. Maternal mortality	Since 2021, maternal mortality rates have decreased by nearly 50% to 18.6 per 100,000 in 2023 from 32.9 per 100,000 in 2021. This has been a reversal in the trend that was seen from 2018 – 2021, where maternal mortality rates nearly doubled.³ Even so, the US has the highest maternal mortality rate of comparable countries.⁴
	Patient 3. Infant mortality	Long-term improvements in infant mortality have plateaued over the last 5 years. Rates stayed the same at 5.6 deaths per 1,000 live births between 2022 and 2023. ⁵
	Patient 4. Highest health-related mortality causes	Since 2019, the rates of the top three non-COVID health-related causes of death – heart diseases, cancer, and cerebrovascular diseases (stroke and aneurysms) – have remained stable.⁶ After a peak in 2021, diabetes-related death rates have decreased for two consecutive years, signaling the early impact of insulin access policies.
	Patient 5. Chronic disease prevalence	Over the last decade, the prevalence of chronic conditions has grown by 5.6%, with 76.4% of US adults managing at least one condition in 2023.⁷ The leading causes of growth since 2013 are obesity (+15.5%) and depression (+14.1%).

Care Engagement & Preventative Visits

Doctor visit rates in 2023 reached 84.5% of adults, just shy of the 2019 high (84.9%), indicating a return to routine preventive care disrupted by the pandemic.¹⁸ Mental health service utilization also increased by approximately 9.5% from 2022 to 2023, aided by telehealth expansion and cultural destigmatization.¹⁹²⁰ Although these trends suggest rising care engagement, persistent issues including affordability, wait times, and uneven provider distribution, continue to limit access to care.²¹

One cornerstone of preventative medicine, vaccines, has plateaued in recent years. Adult influenza immunization rates have remained stable since 2019 but remain below 50%.²² Childhood influenza vaccinations saw a dip in the latest birth cohort comparisons, along with decreases in coverage of recommended vaccinations during the second year of life.²³ Many of the 12- to 24-month-old vaccinations are follow-up doses in series of vaccinations given to infants, suggesting issues with health care access and effective communication. Vaccination rates vary widely from state to state, demonstrating differences in health infrastructure across the US. During the 2023-2024 flu season, the eligible Massachusetts population got inoculated at almost twice the rate of Mississippi (33.4% for MS versus 62.2% for MA).²⁴

Patient experience has changed much over the last five years, with ~72% of hospital patients rating their overall experience highly each year.²⁵ Care transition at discharge remains a weak point for in-patient care, with only 52% confirming they worked with providers and got the information they needed for care outside the hospital. Without proper care plans, some hospital patients will end up being readmitted. Aware of this issue, the Centers for Medicare & Medicaid Services (CMS) created a value-based Hospital Readmissions Reduction Program (HRRP) to incentivize improvements in discharge care plans and coordination to reduce avoidable readmissions.²⁶

So far, the program has not been effective. From 2020 to 2023, most hospitals (95.2%) reported the same readmission rates across all HRRP measures, but more hospitals got worse (2.6%) than improved (2.2%).²⁷ When measuring changes in the number of hospital return days for readmitted patients, 16.5% of hospitals reported longer stays in 2023 than in 2020, compared to only 9.5% of hospitals reporting shorter stays. With hospital closures and provider shortages contributing to increased workloads on providers, readmission rates stand to increase without changes to HRRP or incentives from other sources.

Although readmissions are up, the Prevention Quality Index (PQI), which measures admission rates for conditions that are treatable outside of the hospital, improved from 1,306 per 100,000 in 2019 to 1,040 in 2024.²⁸ The decrease in admission rates is primarily due to a decrease in chronic obstructive pulmonary disease (COPD) admissions, a known COVID-19 complication. Improved respiratory admissions rates also affected pneumonia rates. Diabetes admissions rose during the same period, suggesting not all preventable conditions improved post-pandemic.

Table 2. Care Engagement Metrics

Trending	Metric	Description
	Patient 6. Annual doctor visits	In 2023, 84.5% of adults visited a doctor in the last 12 months. Overall annual visits have remained relatively constant in the last 5 years, with a slight decrease from 2019 – 2021 due to the COVID-19 pandemic. 2023 had the second highest rate of annual visits, with 2019 holding the highest at 84.9% of adults.⁸
	Patient 7. Preventable hospitalizations, using the Prevention Quality Index	The Agency for Healthcare Research and Quality (AHRQ) publishes a Prevention Quality Index (PQI) each year to identify cases of hospitalizations that could have been avoided.⁹ The overall composite score (PQI #90) summarizes trends in preventable hospitalizations. After a peak in 2020, the PQI improved year over year until leveling out at a rate of 1,040 per 100,000 in 2023 and 2024. Even after controlling for COPD rate, which were elevated due to COVID-19 complications, PQI #90 still improved, driven by lower admission rates for community-acquired pneumonia.
	Patient 8. Immunization rates	The percentage of adult recipients of the influenza vaccine has been stable since 2019, fluctuating between ~47% to ~49%.¹⁰ This leaves room more improvement, since less than half of American adults are regularly getting their flu shots. Coverage of childhood-recommended vaccines declined between 2018/2019 and 2020/2021 birth cohorts, with the largest declines in vaccines during the second year of life and seasonal flu vaccination.xxxix
	Patient 9. Patient satisfaction	The Hospital Consumer Assessment of Healthcare Provider and Systems overall Hospital Rating has remained stable since 2019 at about 72% of respondents rating the hospital a 9 or 10 out of 10.¹¹ Care transition remains a challenge, with only about half of respondents confirming they received adequate discharge information.

Mental Health & Substance Use

Mental illness continued to affect nearly one in four adults, with a slight decrease from 23.1% in 2022 to 22.8% in 2023.²⁹ Although this marked the first annual decline in recent years, the overall trend over the past decade remains upward.³⁰ Encouragingly, access to mental health treatment continues to expand, with utilization rising steadily.³¹ Together, persistent levels of mental illness and suicide highlight the enduring effects of social isolation, economic instability, and broader societal stressors that extend beyond the reach of clinical care. One of the devastating outcomes of mental illness is suicide. Suicide deaths declined by 1.4% from 2022 to 2023, potentially influenced by expanded crisis access through the 988 Suicide & Crisis Lifeline launched in mid-2022.³² ³³ However, suicide rates remain elevated compared to pre-pandemic levels.³⁴ Suicide rates are much higher in some states than others. Three states (AK, MT, and WY) experienced over 25 suicide deaths per 100,000 people in 2023 while six states (RI, MD, CT, MA, NY, and NJ) had under 10 per 100,000.³⁵ There is a strong relationship between suicide rates population density, as Alaska, Montana, and Wyoming are the three emptiest states in the US. The figure below shows the statistically significant relationship between the two measures, highlighting the importance of combating isolation, whether through digital connections, home visits, or other community outreach.

Figure 1. Relationship Between Population Density and Suicide Rates

Illicit drug use remained stable around 9% in 2023, while opioid misuse declined by about 3% from 2022 to 2023.³⁶ This reduction reflects the impact of harm reduction strategies such as expanded naloxone distribution and policy reforms targeting the opioid crisis. ³⁷,³⁸ While these improvements offer reason for cautious optimism, substance use trends still demand continued vigilance and investment.

Table 3. Mental Health and Substance Use Metrics

Trending	Metric	Description
	Patient 10. Mental health service utilization	Rates of mental health utilization have continued to steadily rise since 2015. In 2023, 23% of adults reported receiving mental health care in the past year, up from 14% in 2015. Rates increased by 2 percentage points between 2022 and 2023.¹²
	Patient 11. Suicide deaths	Deaths from suicide declined slightly in 2023 to 14.1 per 100,000 people compared to the peak of 14.3 per 100,000 in 2022. 2023 rates matched pre-pandemic levels (2019) but still follow an overall increasing trend within the last 20 years.¹³
	Patient 12. Rates of mental illness	Rates of mental health illness decreased slightly from 23.1% in 2022 to 22.8% in 2023. However, Rates of mental health illness have continued to increase by nearly 25% in the last 10 years, from 18.5% in 2013 to 22.8% in 2023.¹⁴
	Patient 13. Rates of substance/drug misuse	Use of illicit drugs continues to remain relatively stable around 9%, with a 0.5 percentage point increase since 2018. Opioid usage is slowly decreasing, from 3.8% in 2018, 3.3% in 2022 to 3.2% in 2023.¹⁵

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Provider

Workforce expansion continues, but persistent shortages and facility constraints expose structural vulnerabilities.

The Provider pillar reflects the supply side of healthcare, including workforce, infrastructure quality, health access, and patient engagement. While the number of healthcare professionals continues to grow, infrastructure remains constrained, and provider shortages persist—particularly in key specialties and rural areas.

Healthcare Workforce

The per capita supply of core clinical staff has grown steadily over the past decade, including a 12% increase in physicians, 30% in registered nurses (RNs), and 43% in physician assistants (PAs).³⁹⁴⁰ Mental health provider availability has also improved, with an 8% increase between 2022 and 2023.⁴¹

The gains in clinical staff supply, however, are not evenly distributed, and projected shortfalls, especially among physicians, highlight ongoing pressure from rising care demand and training bottlenecks. While the overall number of physicians has increased, distribution remains a critical issue. As of March 2025, there are 7,749 designated primary care Health Professional Shortage Areas (HPSAs) in the United States, affecting over 77 million residents.⁴² This means only 47.5% of patient needs are met with current primary care physicians. Addressing this gap would require an additional 13,364 physicians. Shortages are more severe in some states than others, ranging from 14.6% of need met in Delaware to 77.8% of need met in Vermont. National projections estimate that the US could face a shortfall of up to 86,000 physicians by 2036, highlighting both immediate and long-term workforce alignment challenges.⁴³

The increased growth rate of RNs and PAs relative to physicians suggests support staff are playing a greater role in health care delivery to fill staff shortages. Among physicians who support removing barriers to allow PAs to practice without physician agreements, 68% cited easing provider shortages and reducing patient wait times as the main reasons to change regulations.⁴⁴ Even without regulatory changes, health care centers are becoming more reliant on PAs to deliver care because they are cheaper labor and faster to train, lowering healthcare costs while addressing care shortages.⁴⁵ There is a meaningful quality tradeoff—with far less training, PAs have higher rates of diagnostic errors and malpractice, causing an increased need for defensive medicine to prevent lawsuits. The use of defensive medicine stands to become more prominent as the ratio of PAs to physicians increases, raising questions about the sustainability of this trend.

In addition to clinical personnel, over 1.3 million individuals in the U.S. healthcare workforce were employed in administrative roles, such as medical secretaries, assistants, and health services managers as of 2023. ⁴⁶⁴⁷ These roles reflect the healthcare system’s growing administrative complexity. Physicians continue to experience burnout, with burdensome administrative tasks cited as a top challenge in their jobs.⁴⁸⁴⁹ Read more about increased administrative burden in this topic deep dive.

Table 4. Healthcare Workforce Metrics

Trending	Metric	Description
	Provider 1. Number of physicians and surgeons per capita	The number of doctors rose to 345 per 100,000 people in 2023 compared to 330 in 2021 or 307 in 2013. The number has steadily increased by 12% (with some fluctuations) in the last decade.¹⁶
	Provider 2. Number of registered nurses per capita	The number of registered nurses (RNs) increased from 1,211 per 100,000 in 2017 to 1,395 per 100,000 in 2023. Over the last decade, the number of registered nurses has risen by 30%, showing a steady increasing trend.¹⁷
	Provider 3. Number of mental health providers per capita	The number of mental health professionals increased to 92 per 100,000 in 2023 from 73 per 100,000 in 2017. Increased 8% in the last year.¹⁸
	Provider 4. Number of physician assistants per capita	The number of Physician Assistants (PAs) in the US has increased greatly since before the pandemic, increasing from 37 per 100,000 in 2017 to 53 per 100,000 people in 2023.¹⁹

Healthcare Infrastructure

Meanwhile, facility-based capacity continues to decline. The number of hospital beds per capita has fallen nearly 20% over the past two decades, reinforcing the long-term shift toward outpatient and community-based care.⁵⁰ Hospital closures are concentrated in rural areas, representing 98% of all hospital closures since 2015.⁵¹

This shift has been accelerated by value-based reimbursement models, such as diagnosis-related group (DRG) payments, which incentivize shorter hospital stays.⁵² Advances in medical technology have also enabled more complex procedures to be safely performed in outpatient settings, reducing the need for inpatient admissions.⁵³ Additionally, evolving patient preferences for care that is convenient, lower cost, and closer to home have increased demand for ambulatory surgical centers, retail clinics, and urgent care facilities.⁵⁴

Providers are busier than ever, with patients experiencing increased wait times to receive care.⁵⁵ In 2022 investigative research, the average wait in US metro areas was 38 days, over three weeks more than the oft-referenced industry standard of 14 days. Another survey tracked wait times over time and found 8% increased waits in 2022 compared to 2017 and 24% increases since 2004.⁵⁶

Sometimes patients can’t afford to wait for scheduled appointments and seek care at emergency departments. Getting timely care at an emergency room is unlikely to happen, with the median American spending 163 minutes in the ER before leaving from their visit.⁵⁷ In some states, the wait is much longer: the median patient seeking care in Maryland will spend over four hours (250 min.) in the emergency department before leaving their visit.⁵⁸ This inefficiency in replacing primary care with emergency room care highlights the importance of other healthcare access points to serve patients in a timely manner.

Table 5. Healthcare Infrastructure Metrics

Trending	Metric	Description
	Provider 5. Number of Hospital Beds	The number of hospital beds per 100,000 people decreased slowly by nearly 20% over the last two decades, reflecting a shift from inpatient to outpatient care.²⁰
	Provider 6. Hospital Closures by Rurality	Since 2015, only 2 hospital closures in the US occurred in urban areas versus 105 closures in rural areas.²¹ The rate of closure is slowing, with only 5 closures in 2024 compared to 8 in 2023 and 17 in 2019, but the concentration of closures in small rural communities has persisted.
	Provider 7. Average Wait Times	According to a recent report, only 6% of US metro areas had a wait time less than or equal to 14 days, with an average wait of 38 days.²² Another recent survey found 2022 wait times increased by 8% from 2017 and 24% from 2004.²³ Americans spend a median of 163 minutes at the emergency department before leaving, a 26-minute increase since 2019.²⁴

Utilization and Care Access Points

Patients are increasingly turning to alternative care models. Utilization of urgent care centers declined slightly by 2.8% in 2023—from 32.5% to 31.6% of the population—but remains well above pre-pandemic levels.⁵⁹ Recent studies support this behavior, noting that patients increasingly turn to urgent care due to convenience, timely access, and the desire to avoid emergency departments for lower-acuity issues.⁶⁰⁶¹ Telehealth use rebounded by 24% between 2022 and 2023, increasing from 190.4 million to 236.4 million users. Despite this growth, total telehealth utilization has remained nearly flat since the early pandemic, with 2023 usage only 1.5% below 2020 levels.⁶² This plateau underscores persistent gaps in digital health infrastructure. Reimbursement uncertainty and regulatory complexity are major barriers: 77% of physicians cite inconsistent payment policies as a deterrent to adoption.⁶³ In addition, digital access disparities remain a persistent issue, particularly among rural, elderly, and low-income populations lacking internet access or devices needed for virtual care.⁶⁴

Table 5. Healthcare Infrastructure Metrics

Trending	Metric	Description
	Provider 8. Utilization of Urgent Care Clinics	Utilization of urgent care clinics rebounded to above pre-pandemic levels in 2023 after decreasing in 2020 and 2021 due to the COVID-19 pandemic. Utilization of urgent care clinics slightly decreased from 32.5% of the population in 2022 to 31.6% in 2023.²⁵
	Provider 9. Medicare Telemedicine Utilization	Telehealth use among the general U.S. population increased from 190.4 million users in 2022 to 236.4 million in 2023, a growth of 24%. However, total usage has remained relatively flat since the start of the pandemic, with 2023 figures only 1.5% lower than 2020 levels.²⁶
	Provider 10. Home Health Care Services Utilization	According to a 2023 report, 79% of Americans did not use home health care services in the previous years but those who did were overwhelmingly satisfied with the level of care they received.²⁷ About a third of home health care recipients were younger adults, with only 9% of age 55 and over taking advantage. This indicates room to grow in home health services.

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Payer

The healthcare spending is growing faster than the overall economy for both payers and patients as insurance companies reduce coverage and individuals delay medical treatment due to costs.

The Payer pillar represents how the US health ecosystem funds healthcare and the cost of care. It includes metrics measuring healthcare costs and the mechanisms patients use to pay for their care, including health insurance. Compared to all other Organization for Economic Cooperation and Development (OECD) member countries, US healthcare costs were over $3,700 higher per capita, and a small but increasing proportion of Americans struggle to access care due to costs.⁶⁵

Healthcare Spending

American healthcare expenditures continue to rise. In 2023, from the most recent National Health Expenditure (NHE) data, total healthcare expenditures reached $4.87 trillion, exceeding 2020 COVID-19 pandemic levels.⁶⁶⁶⁷ Spending on public health insurance grew, even after controlling for inflation. Medicare spending grew 4.6% from 2022 to 2023, with large growth in dental services (56.2%), durable medical equipment (14%), and other non-durable medical equipment (26.3%). Medicaid spending grew 4.5% from 2022 to 2023, with large growth in prescription drugs (8%), other professional services (6.5%)

Read more about Medicare and Medicaid spending trends in this topic deep dive.

Table 7. Healthcare Spending Metrics

Trending	Metric	Description
	Payer 1. Total annual US health expenditures²⁸	Total national health expenditures eclipsed 2020 pandemic levels in 2023, reaching $4.87 trillion. 2023 expenditures per capita also increased by 3.1% compared to 2022.²⁹
	Payer 2. Total annual Medicare expenditures	Total Medicare health expenditures grew by 7.2% from 2019 to 2023 and 4.6% since 2022. ³⁰This growth was driven by prescription drug, durable medical equipment and dental services spending.
	Payer 3. Total annual Medicaid expenditures	Total Medicaid health expenditures grew by 18.7% from 2019 to 2023 and 4.5% since 2022.³¹ This growth was driven by prescription drug, net cost of health insurance, and other health and professional services spending.

Healthcare Cost

Per capita out-of-pocket (OOP) health care costs reached $1,514 in 2023, a 2.8% increase to compared to 2022 after controlling for inflation.⁶⁸ Americans are putting more of their income toward health care costs even though healthcare premiums are not outpacing inflation, indicating higher prices and/or reductions in health benefits.⁶⁹ Only South Korea spends more OOP per capita on healthcare than the US, demonstrating the increased cost of staying healthy in America versus the rest of the world.⁷⁰

Higher OOP costs mean rationing or foregoing care for some Americans. In 2023, 6.3% forewent medical care, 7.2% delayed care, 7.8% rationed prescribed medication, and 5.5% forewent mental health care due to cost concerns.⁷¹ All of these measures stayed the same or increased since 2022, indicating worsening affordability of health care. Skipping care due to cost is more common in the US than in comparable countries, where an international survey of older adults found that 8% of Americans reported avoided visiting a doctor due to cost despite having a medical problem (other country responses ranged from 1-7%).⁷²

Table 8. Healthcare Cost Metrics

Trending	Metric	Description
	Payer 4. Annual OOP expenses ³²	Americans spent $1,514 per capita on out-of-pocket healthcare expenses in 2023, a 2.8% increase from $1,472 in 2022.³³
	Payer 5. Health insurance premiums	Premiums for employer-sponsored health insurance increased by over 6.6% from 2022 to 2023 for both single and family plans, on par with 2022 inflation (6.5%).³⁴
	Payer 6. Forgone or delayed medical care due to cost	While still below pre-COVID levels, more American adults are rationing medical care in 2023 than in 2022. Foregoing medical care due to cost remained at 6.3% in 2023 (8.3% in 2019; 6.3% in 2022). Delaying medical care due to cost increased by 0.2 percentage points to 7.2% in 2023 (9.6% in 2019; 7.0% in 2022).³⁵
	Payer 7. Not taking medication as prescribed due to cost	While still below pre-COVID levels, more American adults are rationing medical care in 2023 than in 2022 Not taking medication as prescribed due to costs increased by 1 percentage point to 7.8% in 2023 (versus 9.6% in 2019; 6.8% in 2022).³⁶
	Payer 8. Forgone mental health care due to cost	An increasing number of Americans can’t afford needed mental health care. The proportion of Americans forgoing mental health care due to cost increased by 0.5 percentage points to 5.5% in 2023 (versus 5.0% in 2022; 4.4% in 2019).³⁷

Healthcare Enrollment

In the US, the rate of insured Americans has stabilized at about 92% since 2019.⁷³ This is mainly due to enrollment saturation after implementation of the ACA. This measure is still lower than peer countries: the US is the only OECD country with under 95% population health coverage, and 20 of the 38 OECD member countries boast 100% coverage.⁷⁴

Medicare enrollment rates have mildly and steadily increased by 0.7 percentage points from 2019 to 2023, matching the growing eligible population. The composition of Medicare enrollees has moved from government-managed fee-for-service (FFS) plans to privately-managed Medicare Advantage (MA) plans. In 2018, MA plans represented a minority share (36%) of all Medicaid plans. ⁷⁵ In 2024, MA overtook FFS in enrollment by about 200,000 (~0.4%) enrollees. This rapid change shows that the government is increasingly relying on private providers to manage Medicare insurance plans.

Medicaid enrollment from 2019 to 2023 grew by 1.5 percentage points, but more recent data shows a reverse in the trend. Since the end of the continuous enrollment requirement for COVID-era federal funding in April 2023, Medicaid enrollment has decreased by 17% from 94.6 million to a relative low of 78.5 million as of December 2024.⁷⁶ The change in continuous enrollment has impacted child enrollment rates, with many children losing coverage for procedural reasons rather than confirmed ineligibility.⁷⁷ 69% of all state unwinding disenrollment was for procedural reasons, indicating Medicaid-eligible Americans were removed from rolls due to changes in paperwork requirements.⁷⁸ More frequent eligibility checks are associated with more procedural disenrollment of beneficiaries who are otherwise eligible, as evidenced by policy changes in Texas.⁷⁹

Table 9. Healthcare Enrollment Metrics

Trending	Metric	Description
	Payer 9. % of US insured by any insurance	Overall health insurance coverage rates have hovered at around 92% since 2019.³⁸ This stagnation represents enrollment saturation after sharp increases from the passage of the ACA almost 20 years ago.
	Payer 10. % of US covered by Medicare	Medicare coverage rates have steadily increased by 0.7 percentage points from 2019 to 2023, showing that enrollment share has increased with the growing eligible population. ³⁹
	Payer 11. % of US covered by Medicaid	Medicaid coverage rates have also steadily increased from 2019 to 2023 by 1.5 percentage points. ⁴⁰ However, more recent enrollment data from 2024 shows significant enrollment dips due to procedural disenrollment, particularly in children.⁴¹ ⁴²

Healthcare Coverage & Market Competition

Insured individuals expect to have their healthcare covered, but that isn’t always the case. With public attention and news coverage on denial of claims, especially their association with the murder of UnitedHealthcare CEO Brian Thompson, this year we have added some metrics to reflect coverage rates. About 1 in 5 (19%) of in-network claims were denied by health insurance exchange plans in 2023, which is a 3 percentage point increase from 2022.⁸⁰ 9 large providers (with over 5 million annual claims) exceeded the 19% overall in-network denial rate, led by BCBS of Alabama at 35% and UnitedHealth Group at 33%.⁸¹

Although Medicare and Medicaid do not publish their claim denial rates, 10% of Medicare and 12% of Medicaid beneficiaries in a 2023 KFF survey had to pay care they thought was covered but was denied.⁸² This is less than the 19% of marketplace plan beneficiaries who were denied a claim they thought was covered, suggesting coverage issues are more prevalent in private insurance plans.

Americans don’t often have many choices for healthcare. A market concentration analysis found that 95% of US insurance markets were highly concentrated, defined by markets where a single insurer holds a 30% or higher market share of all health insurance plans.⁸³ 47% of the markets were heavily concentrated, where one insurer held at least a 50% share of plans. The 2023 numbers are up from the 74% concentration mark in 2019, indicating decreased competition in the market. With decreased competition, increased claim denials and OOP costs are expected, decreasing the reliability and value of insurance plans for individuals.⁸⁴ Markets for Medicare Advantage plans are also highly concentrated, with 97% of markets meeting concentration criteria in 2023, demonstrating that government has not been effective at creating competition in their private insurance partners.

Table 10. Healthcare Coverage and Competition Metrics

Trending	Metric	Description
	Payer 12. Exchange Plan Claim Coverage	Overall claim denial rates were 19% for health insurance exchange plans in 2023, a 3 percentage points increase compared to 2022.⁴³
	Payer 13. Medicare and Medicaid Plan Claim Coverage	Although Medicare and Medicaid do not publish claim coverage rates, a recent survey found 10% of Medicare beneficiaries and 12% of Medicaid beneficiaries had a claim denied they thought was covered.⁴⁴
	Payer 14. Market Concentration of Insurance Companies	95% of health insurance markets were highly concentrated in 2023, according to the Herfindahl-Hirshman Index (HHI).⁴⁵ The HHI calculates the share size of each industry competitor in each market, with higher resulting values in markets with high-share competitors. This is up from 74% of markets in 2019.⁴⁶

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Research & Development

The US continues to invest heavily in R&D as a growing proportion of innovations are funded by private companies and tested abroad.

The Research and Development (R&D) pillar represents innovations in biotechnology and pharmaceuticals. It includes metrics measuring investment in new technologies and actions to improve healthcare delivery. Overall, R&D is a historic area of strength for the United States that has become more business-driven over the last few decades.

R&D Spending

The United States is a world leader in healthcare R&D, with four of the five biggest biotech companies and four of the five biggest revenue pharmaceutical companies in the world headquartered in the US.⁸⁵ ⁸⁶ Among OECD member countries, only Israel spends more per capita onR&D than the US.⁸⁷

US R&D investments have grown in the last two decades, but recently spending has fallen. PhRMA member company domestic R&D investmentfell by over 5% in both 2022 and 2023, dropping below 2020 levels.⁸⁸ This follows the pattern of companies reviewing their R&D pipelines and refocusing on highly successful trials to bring spending back to pre-pandemic levels, like Moderna, who strategically cut 20% of their 2025-2028 R&D spending.⁸⁹⁹⁰

The National Institutes of Health (NIH) is the largest public funder of biomedical research in the world with an annual budget of over $47 billion.⁹¹ Over the last decade, R&D as a proportion of GDP has grown (2.67% in 2012 to 3.43% in 2022).⁹² However, almost all of that growth was due to private sector-funded R&D, which increased by 0.89 percentage points as a share of GDP in the same timeframe. As of 2022, businesses now represent 75% of all US R&D spending (up from 63% in 2012). This trend is likely to accelerate as the new administration proposed budget cuts to NIH in April 2025, which would force research institutions to look elsewhere for funding.cxl Between February 28, 2025 and April 8, 2025, the US government canceled $1.8 billion in NIH grants, impacting 400 research projects.⁹³

Table 11. R&D Spending Metrics

Trending	Metric	Description
	R&D 1. Pharmaceutical industry R&D investment	PhRMA member companies have been spending more on R&D over the past two decades. However, domestic R&D has fallen by over 5% in both 2022 and 2023 to below 2020 levels.⁴⁷
	R&D 2. NIH R&D budget authority	The NIH’s R&D investment budget increased by over $12 billion between 2018 and 2023, rising from $35.4 billion to $47.7 billion.⁴⁸

Areas of Innovation

Medical discoveries continue to save lives and improve the living conditions of people managing chronic conditions. In the last decade, glucagon-like peptide-1 receptor agonist (GLP-1 RA) drugs have created a brand-new pathway for managing the epidemic of diabetes and obesity, with recent clinical trials demonstrating the potential of GLP-1 RAs to treat chronic kidney and liver diseases.⁹⁴ Without the dedicated investment in R&D, GLP-1 RAs wouldn’t be the commercial medical miracle they are today. It took over 20 years from the identification of GLP-1 to the first available GLP-1 RA drug, liraglutide, in 2010.

As medicine has advanced, the categories of R&D investment have evolved. The figure below illustrates the changes in funding levels for the top 10 types of health research funded by NIH. While four of the top five research categories have remained the same from 2013 to 2023, others have shifted significantly. Several highlights include the consistent rise in neuroscience and brain disorder research, the more than doubling of behavioral and social science research, and the relative decreases in biotechnology and science research. These trends reflect the cultural shift toward treating neurological and behavioral disorders as illnesses and highlight new research methods made possible by new imaging and mapping technologies.

Table 12. Top 10 NIH Research Spending Categories by Year⁹⁵

2013	2013 USD (in billions)	2018	2018 USD (in billions)	2023	2023 USD (in billions)
Clinical Research	$10.60	– Clinical Research	$13.87	– Clinical Research	$18.88
Genetics	$7.14	– Genetics	$9.11	⬆ Neurosciences	$11.87
Prevention	$6.69	– Prevention	$8.76	– Prevention	$11.68
Biotechnology	$5.70	⬆ Neurosciences	$8.22	⬇ Genetics	$11.39
Neurosciences	$5.34	⬇ Biotechnology	$6.92	⬆ Brain Disorders	$8.89
Cancer	$5.27	– Cancer	$6.34	⬇ Biotechnology	$8.85
Infectious Diseases	$4.89	– Infectious Diseases	$6.02	⬆ Behavioral and Social Science	$8.52
Women’s Health	$3.75	⬆ Brain Disorders	$5.88	⬇ Infectious Diseases	$8.24
Brain Disorders	$3.71	⬆ Rare Diseases	$5.23	⬇ Cancer	$7.97
Behavioral and Social Science	$3.54	⬆ Clinical Trials and Supportive Activities	$5.21	⬇ Rare Diseases	$6.92

Drug innovation continues to deliver new drugs to patients, with the FDA approving an average of 44 new drugs per year over the last decade.⁹⁶ Approvals have fluctuated but increased by ~1.7 drug approvals per year. A relative low of 37 approvals in 2022 wasn’t due to a lack of innovation—FDA clamped down on its Accelerated Approval program after it came under fire for approving and subsequently pulling approvals for the Alzheimer’s drug Aduhelm and two other accelerated drugs due to ineffective trials and safety concerns.⁹⁷ Aduhelm also came with a very high price tag, which caused Medicare and many private insurers to leave it off of their formularies.

The increasing role of private companies in health care innovation has shifted research away from the US. Despite the US’s dominant position in health care R&D, China has been consistently growing its global presence. Since 2020, there have been over 300 licensing, merger, or acquisition deals with Chinese-based R&D companies.⁹⁸ Chinese contributions in clinical trials have also grown in the last five years: China’s share of global clinical trials grew from 19% in 2019 to 30% in 2024 while the US share remained stagnant at 35%.⁹⁹ Changes in US trade policy are also revealing vulnerabilities in the international pharmaceutical supply chain that impact the ingredients developers use to create life-saving medications. Read more about challenges in US pharmaceutical supply chain in this topic deep dive.

Table 13. R&D Innovation Metrics

Trending	Metric	Description
	R&D 3. NIH spending by topic: top 10 in 2023, over time	The top categories of research spending remained largely static over the past decade. Four of the top five categories in 2013, 2018, and 2023 were Clinical Research, Genetics, Neurosciences, and Prevention.⁴⁹
	R&D 4. Number of novel FDA drug approvals	Over the last decade, the number of novel drug approvals as increased by ~1.7 drugs each year with an average of 44 drugs approved per year.⁵⁰
	R&D 6. US share of clinical trials	Since 2019, the US has maintained a 35% share of global clinical trials. During the same timeframe, China increased their clinical trial share from 19% to 30% while Europe’s share declined from 26% to 21%.⁵¹

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Conclusions

In this latest annual examination of the health of the US health ecosystem, Rios Partners highlighted trends across four pillars:

Patient pillar: While maternal mortality has improved, Americans are dealing with worsening chronic conditions and mental health outcomes.
Provider pillar: While the number of healthcare professionals per capita increases, they haven’t kept pace with healthcare demand. While more patients are turning to urgent care, growth in telehealth has plateaued, highlighting gaps in digital health infrastructure.
Payer pillar: Both payers and patients are paying more for healthcare while plans cover less, making healthcare less affordable and less reliable.
R&D pillar: Innovation outcomes in R&D remained strong as funding burden increasingly shifts toward private companies.

The 2024 report also conducted deep dives on three topics relevant to current health discourse:

Administrative burden: Rural healthcare centers are under-equipped to handle a higher need and more dispersed patient population. Equipping rural providers with automated solutions will reduce administrative burden but requires significant investment and policy transformation to be successfully implemented.
Pharmaceutical supply chain: COVID-19 exposed the vulnerabilities of US reliance on international markets for pharmaceutical inputs and manufacturing, resulting in drug shortages and increased costs. As China strategically positions itself as a major market player, the US should pursue strengthening global partnerships and building domestic supply chain resilience.
Medicare and Medicaid expenditures: Increases inrecent prescription drug spending are driven by market incentives to raise drug prices and structural changes to Medicare and Medicaid drug benefits. Regulating pharmacy benefit managers (PBMs) and redesigning CMS formularies could help control drug spending. Recent medical equipment spending increases are driven by changing American demographics and needs as more patients receive home health care services. Integrating home health care into the traditional care model will increase durable medical equipment access while reinvigorating competitive bidding programs will help contain equipment costs.

This report looks across the overall US health ecosystem to provide context and insights that elicit conversations to inspire future action and analyses. We hope the questions from each deep dive topic kickstart discussions on today’s most pressing health issues and policy solutions.

Deep Dive Insights

Medicare and Medicaid Expenditures: Medical Equipment

An aging US population is managing more chronic conditions that require home-based medical aids, driving up demand for medical equipment as Medicare has expanded coverage. This deep dive explores how health care providers, payers, and equipment manufacturers can adjust to market changes to continue expanding options for managing health at home.

Medicare and Medicaid Expenditures: Prescription Drugs

Increases in recent prescription drug spending are driven by market incentives to raise drug prices and structural changes to Medicare and Medicaid drug benefits. This deep dive explores approaches to addressing root causes of rising expenditures so payers and patients will have access to quality medications at the lowest reasonable costs.

Administrative Burden in U.S. Healthcare: A Focus on Rural Systems and Workforce Sustainability

Rural healthcare centers are under-equipped to handle a higher need and more dispersed patient population. This deep dive explores solutions for reducing provider administrative burden so they are better able to serve their patients.

Securing the US Pharmaceutical Supply Chain

COVID-19 exposed the vulnerabilities of US reliance on international markets for pharmaceutical inputs and manufacturing, resulting in drug shortages and increased costs. This deep dive explores how the US can build supply chain resilience for pharmaceutical products to better ensure patients have access to life-saving treatment.

Health of Health Report

2024 Health Of Health

Introduction

Executive Summary

Patient

Health Outcomes

Care Engagement & Preventative Visits

Mental Health & Substance Use

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Provider

Healthcare Workforce

Healthcare Infrastructure

Utilization and Care Access Points

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Payer

Healthcare Spending

Healthcare Cost

Healthcare Enrollment

Healthcare Coverage & Market Competition

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Research & Development

R&D Spending

Areas of Innovation

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Conclusions

Deep Dive Insights

Medicare and Medicaid Expenditures: Medical Equipment

Medicare and Medicaid Expenditures: Prescription Drugs

Administrative Burden in U.S. Healthcare: A Focus on Rural Systems and Workforce Sustainability

Securing the US Pharmaceutical Supply Chain