Dental spending skyrocketed to $162B in 2021

Although U.S. healthcare spending grew less than 3% to about $4 trillion in 2021, dental services expenditures made a major turnaround, increasing by about 16% to nearly $162 billion, according to a study published online on December 14 in Health Affairs.

In 2021, the sector saw an uptick in spending on dental services from private insurance companies, Medicaid, and patients' wallets. A decline in U.S. government expenditures for healthcare, which was up in 2020 mostly in response to COVID-19, drove the slower overall healthcare spending in 2021, the authors wrote.

"The trends in healthcare spending in 2021 are linked to the many unique impacts of the COVID-19 pandemic, including the substantially reduced federal COVID-19 supplemental and public health expenditures and an increase in the use of healthcare goods and services as people sought care at a higher rate than in 2020," Anne Martin, an economist with the U.S. Centers for Medicare and Medicaid Services, Office of the Actuary, said in a press release.

Overall, the healthcare sector accounted for about 18% of the economy in 2021, which is a decrease. In 2020, it was about 20% of the economy. Spending on dental services, along with hospital care and doctor and clinical services, helped increase growth for 2021, and it also was the most spent in the last five years.

For private health insurance spending, dental services expenditures increased by about 16% in 2021. That comes after an approximate 10% drop in 2020, according to the study.

In 2021, out-of-pocket spending growth increased for nearly all medical goods and services. However, the most significant accelerated growth was seen in dental services, which rose 18% in 2021 compared to an 11% decrease in 2020. For dental services, out-of-pocket spending accounted for 39% of the total category in 2021, the authors wrote.

Medicaid spending for goods and services rose about 10% in 2021 after a growth rate of approximately 6% in 2020. Faster growth in spending for hospital care, physician and clinical services, and dental services drove the increase. Dental services spending, which accounts for a 2% share of total Medicaid spending, grew about 21% in 2021, which is a major reversal from the approximate 4% percent in 2020.

"In 2021, the healthcare spending trend reflected the impact of substantially reduced federal COVID-19 supplemental and public health expenditures (compared with 2020), along with the effect of strong growth in the use of healthcare goods and services as people sought care at a higher rate than in 2020," Martin and colleagues wrote.