The Consumer of Healthcare 2025: Current Spending, AI in Medicine, and the Need for Consumer Control (Part VII)
That Time of the Year
It’s that time of year again—around this time, the U.S. government actuaries, part of the Department of Health and Human Services (HHS), particularly the Centers for Medicare and Medicaid Services (CMS), release two key documents. One reflects healthcare costs from the previous year (in this case, 2023), and the other offers a 10-year cost projection. As a policy wonk and numbers enthusiast, this is always a highly anticipated read for me.
The 2023 report, in a nutshell, shows that we’re spiraling out of control. As highlighted in this blog page, “The United States of Healthcare,” national health expenditures (NHE) hit a staggering $4.9 trillion in 2023, reflecting a 7.5% increase from 2022. You can find the full report linked below.
The Summary – As Published
Healthcare spending in the U.S. reached $4.9 trillion, marking a 7.5% increase from 2022, which was higher than the previous year’s growth rate of 4.6%. In 2023, the insured share of the population reached 92.5%, with private health insurance enrollment growing robustly for the second consecutive year. Spending on both private health insurance and Medicare outpaced the previous year’s growth, while Medicaid spending and enrollment growth slowed as the COVID-19 public health emergency ended. The health sector’s share of the economy in 2023 stood at 17.6%, slightly up from 17.4% in 2022, though still lower than during the pandemic’s peak years of 2020-2021. State and local governments contributed a larger share of healthcare spending in 2023, while the federal government’s share decreased as COVID-19-related funding wound down.
In our “About Us” section, we’ve been citing $5 trillion as the healthcare expenditure threshold, knowing that we had already surpassed it by now. We’ve seen increases in spending across the board, and 2024 is likely to see an even steeper rise. Reports from major U.S. healthcare insurance companies confirm that utilization has risen sharply. Conversations with doctors, nurses, and healthcare providers in Florida—where the healthcare industry is booming due to the state’s aging population—suggest a 50% to 100% increase in patient volumes in some areas.
For perspective, Florida’s healthcare expenditures per capita are approaching $20,000, far higher than the national average of $14,000. If Florida were honest about its economy, healthcare would be the state’s leading industry, outpacing tourism, agriculture, and retail—but such an admission wouldn’t make for a great tourist commercial.
Key Insights from the CMS Report
Among payers, private health insurance spending saw the sharpest increase in 2023, rising by 11.5%, compared to 6.8% in 2022. Medicare spending also grew faster, at 8.1%, compared to 6.4% the previous year. This surge was mainly driven by hospital care services and retail prescription drugs. Medicaid spending growth continued but slowed slightly, from 9.7% in 2022 to 7.9% in 2023.
Implications
The CMS report indicates that Medicare is growing at an unprecedented rate, adding 13,000 new beneficiaries daily through 2024 and 2025. Many of my daily conversations with doctors, providers, investors, and industry experts conclude that this trend cannot continue. U.S. healthcare has already broken—it’s just a matter of time before the system’s flaws are more visible. Americans, frustrated by the handling of the COVID-19 pandemic, are now questioning the healthcare system at large. Recent events, such as the unexpected public support for the alleged assassin of the CEO of United Healthcare, may be a sign of the deepening frustration. Social media has become a reflection of this collective discontent, with even songs written about the alleged assassin, depicting him as a modern-day Robin Hood. This growing public anger is closely tied to the rising cost of healthcare and its lack of measurable benefits.
The notion of a “Perp-Walk” for healthcare CEOs is gaining traction on social media, with one post garnering over 1.4 million views. This highlights the public’s mounting frustration with the system.
Taking Control of Healthcare
The solution may lie in empowering consumers to take control of their healthcare. With all the money we’re spending, we should see better outcomes, but the reality is that U.S. healthcare lags behind many other nations in terms of results. If you’re curious about these outcomes, you can refer to our previous blogs:
- Healthcare AI: The U.S. Healthcare Model Is Broken and Getting Worse
- Part II: Healthcare AI and the U.S. Healthcare Model
We believe the way forward is for consumers to control their health data and leverage AI to communicate better with providers and challenge insurers with evidence-based facts. The consumer must shift from being the passive recipient of healthcare to actively controlling it. This is where we believe we can make a difference.
AI in Healthcare: Why We Prefer the Consumer Over Providers (for Now)
While AI holds promise in healthcare, we’re not convinced it’s ready for widespread diagnostic use. However, the recent developments in General Artificial Intelligence (AGI) are promising. That said, AI will only succeed in healthcare when it can meet three criteria:
- Save time for providers while improving accuracy.
- Be affordable relative to the time saved.
- Indemnify providers for malpractice and meet the necessary requirements for licensing and credentialing—something we don’t expect to happen anytime soon.
We’re closely following industry experts like John Nostra, and in our next blog, we’ll explore an article from Psychology Today titled, “Will 2025 Be a Technology Wake-Up Call for Clinicians?”
Links to articles for further reading:
-Noel J. Guillama, Chairman
About HealthScoreAI ™
Healthcare is at a tipping point, and HealthScoreAI is positioning to revolutionize the industry by giving consumers control over their health data and unlocking its immense value. U.S. healthcare annual spending has exceeded $5 trillion with little improvement in outcomes. Despite advances, technology has failed to reduce costs or improve care. Meanwhile, 3,000 exabytes of consumer health data remain trapped in fragmented USA systems, leaving consumers and doctors without a complete picture of care.
HealthScoreAI seeks to provide a unique solution, acting as a data surrogate for consumers and offering an unbiased holistic view of their health. By monetizing de-identified data, HealthScoreAI seeks to share revenue with consumers, potentially creating a new $100 billion market opportunity. With near-universal EHR adoption in the USA, and advances in technology, now is the perfect time to capitalize on the data available, practical use of AI and the empowering of consumers, in particular the 13,000 tech savvy baby boomers turning 65 every single day and entering the Medicare system for the first time. Our team, with deep healthcare and tech expertise, holds U.S. patents and a proven track record of scaling companies and leading them to IPO.
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