Spending on physician and clinical services grew 8.1% in 2024 to $1.1 trillion, according to CMS. CMS projects 5.5% average annual growth from 2025 to 2034, so the pace is expected to slow.
These are national totals, not practice revenue. They still give an administrator a yardstick: a practice that grew slower than the national rate in a given year lost ground against the market.
What CMS counted in 2024
CMS's 2024 National Health Expenditures Highlights put total U.S. health spending at $5.3 trillion, up 7.2% after 7.4% growth in 2023. That works out to $15,474 per person, and health care took 18.0% of the economy, up from 17.7% in 2023.
Physician and clinical services made up 21% of that total. The $1.1 trillion figure grew faster than the 7.4% recorded for the category in 2023.
| Spending category, 2024 | Amount | Growth in 2024 | Growth in 2023 |
|---|---|---|---|
| Hospital care | $1.6 trillion | 8.9% | 10.6% |
| Physician and clinical services | $1.1 trillion | 8.1% | 7.4% |
| Retail prescription drugs | $467 billion | 7.9% | 10.8% |
Source: CMS, National Health Expenditures 2024 Highlights and NHE fact sheet. Hospital care grew fastest, but physician services was the only one of the three that sped up from 2023.
Use of services drove the growth, not price
CMS says the 2023 and 2024 growth came mainly from non-price factors, which means more visits, more services per visit, and a shift in the mix of services. Personal health care spending rose an average of 8.9% a year over the two years. CMS calls that the fastest pace since the 9.1% average in 1991 and 1992.
Prices for physician and clinical services rose 1.8% in 2024, up from 0.6% in 2023. Hospital prices rose 3.4% in 2024, the largest increase since 2007, after 2.7% in 2023.
So physician prices rose about 1.8 points while spending rose 8.1%. The remaining 6.3 points came from volume and intensity. A practice that sees more patients without a matching rise in staff cost or capacity is part of that national pattern.
Which payers fund the spending
CMS reports spending by source of funds. Private health insurance paid $1.6 trillion in 2024, up 8.8% after 11.2% growth in 2023. Medicare paid $1.1 trillion, up 7.8% after 9.0% growth in 2023.
Within Medicare, fee-for-service spending grew 6.4% in 2024 after 2.0% in 2023. Medicare Advantage private plan spending grew 9.0%, down from 16.1%. Total Medicare enrollment rose 2.2% to 66.6 million.
Medicaid spending was $931.7 billion, up 6.6%. Medicaid enrollment fell 8.6% to 84.3 million as states resumed eligibility checks, while private insurance enrollment rose from 207.0 million to 214.3 million. Out-of-pocket spending was $556.6 billion, up 5.9%, and CMS notes that physician and clinical services partly offset a slowdown in that line.
| Payer, 2024 | Spending | Growth in 2024 | Share of total |
|---|---|---|---|
| Private health insurance | $1.6 trillion | 8.8% | 31% |
| Medicare | $1.1 trillion | 7.8% | 21% |
| Medicaid | $931.7 billion | 6.6% | 18% |
| Out-of-pocket | $556.6 billion | 5.9% | 11% |
Source: CMS, National Health Expenditures 2024 Highlights and NHE fact sheet.
The CMS projection through 2034
CMS's forecast summary for 2025 to 2034 expects total health spending to grow 5.4% a year on average, against 4.1% for GDP. Health's share of GDP would rise from 18.0% in 2024 to 20.6% in 2034, when spending reaches $9.0 trillion.
For physician and clinical services, CMS estimates 6.2% growth in 2025 to $1.2 trillion. It expects 5.6% in 2026 and an average of 5.0% a year in 2027 and 2028. For 2029 to 2034 the average is 5.5% a year.
| Period | Physician and clinical services growth |
|---|---|
| 2024 (actual) | 8.1% |
| 2025 (estimate) | 6.2% |
| 2026 | 5.6% |
| 2027 to 2028, yearly average | 5.0% |
| 2029 to 2034, yearly average | 5.5% |
Source: CMS, National Health Expenditure Projections 2025-2034 Forecast Summary, June 2026.
CMS ties the slower years to expected drops in enrollment: direct purchase insurance enrollment down 3.7 million in 2026, and Medicaid enrollment down 2.6 million over 2027 and 2028. CMS also projects the insured share of the population to fall from 91.8% in 2024 to 90.5% in 2034.
Other categories in the same forecast average 5.7% a year for retail prescription drugs and 5.2% for hospital care. Among payers, Medicare is expected to grow 7.7% a year, while Medicaid and private insurance each grow 5.0%.
Using the figures in practice planning
Compare your own year-over-year growth in collected revenue per physician with the national line. For 2024 the line was 8.1%, and for 2025 CMS estimates 6.2%. A practice at 4.0% in 2025 grew 2.2 points slower than the category.
Split your own growth into price and volume the way CMS does. If your payer rates rose 1.8% and collections rose 8.1%, volume explains 6.3 points. If rates were flat and collections rose 8.1%, volume explains all of it, and staff cost per visit is the number to watch.
Payer mix matters for the forecast. CMS expects Medicare to grow 7.7% a year and private insurance 5.0%. A practice with 55% Medicare patients faces a different growth path than one with 20%.
Medicare is projected to grow 9.2% in 2026 and 8.4% a year across 2027 and 2028, then 7.3% a year from 2029 to 2034. CMS cites baby boomers enrolling through 2029 as the reason. Private health insurance is projected at 6.3% in 2026 and 4.6% a year in 2027 and 2028.
CMS values the 2025 total for all health spending at $5.7 trillion, a 7.3% rise, and 6.3% growth is projected for 2026. The physician category is projected to grow slower than the total in both years.
Sources
- CMS, National Health Expenditures 2024 Highlights, 2025
- CMS, NHE Fact Sheet, last modified June 24, 2026
- CMS, National Health Expenditure Projections 2025-2034 Forecast Summary, June 2026
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