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U.S. healthcare spending reached $5.3 trillion in 2024, up 7.2% year over year, with projections showing 5.4% average annual growth through 2034. For small businesses operating in the healthcare sector, that trajectory drives rising operating expenses and benefit costs that compound year over year, creating a persistent need for capital.
National Business Capital analyzed healthcare spending data across the national, employer, and small business financing levels to build this report. The sections below move from the national expenditure landscape to the capital decisions that define operations in 2026.
Key Takeaways:
- U.S. national health expenditures hit $5.3 trillion in 2024, up 7.2% year-over-year, with per capita spending reaching $15,474, per CMS
- Employer-sponsored healthcare costs will reach $8,460 per person in 2026, a 7.9% increase from 2025 and the highest single-year jump in over a decade excluding COVID-era fluctuations, per the Milliman Medical Index
- Workers at small firms (under 200 employees) face average single-coverage deductibles of $2,631, compared to $1,670 at large firms, per KFF's 2025 Employer Health Benefits Survey
- Healthcare workforce costs account for 60% of total operating expenses sector-wide, with hospital labor spending exceeding $1 trillion in 2025, per the American Hospital Association
U.S. Healthcare Spending: 5-Year Trend (2020–2024)
National health expenditures expanded from $4.2 trillion in 2020 to $5.3 trillion in 2024, a 26% increase across four years driven by escalating pharmaceutical costs and rising labor expenses across the sector. Growth climbed past 7% in both 2023 and 2024 after pulling back to 4.1% and 4.8% in 2021 and 2022, reflecting the sustained demand for health care services that CMS expects to carry well into the next decade. The table below shows this trajectory in full.
National health expenditures by year. Orange figure shows year-over-year growth.
| Year | National Health Expenditures | Per Capita Spending | YoY Growth |
|---|---|---|---|
| 2020 | $4.2 trillion | $12,640 | +10.5% |
| 2021 | $4.4 trillion | $13,130 | +4.1% |
| 2022 | $4.6 trillion | $13,690 | +4.8% |
| 2023 | $4.9 trillion | $14,570 | +7.4% |
| 2024 | $5.3 trillion | $15,474 | +7.2% |
Key Insights:
- Healthcare spending growth exceeded 7% in both 2023 and 2024, a meaningful acceleration that reversed two years of modest post-pandemic gains and signals sustained pressure on healthcare business budgets
- CMS projects average national health expenditure growth of 5.4% annually through 2034, outpacing projected GDP growth of 4.1% over the same period, meaning healthcare will consume a growing share of total U.S. economic output
Employer Health Benefit Costs: Small Firms vs. Large Firms (2025)
Employer-sponsored health benefit costs have created an uneven burden between small and large businesses, with workers at smaller firms facing deductibles nearly $1,000 higher than their counterparts at large companies. Mercer's 2025 National Survey of Employer-Sponsored Health Plans found that total health benefit costs will rise 6.5% on average in 2026, the highest increase since 2010, and would climb nearly 9% without plan design changes. Our data below compares the key cost benchmarks by firm size for 2025.
| Metric | Small Firms (<200 Workers) | National Average |
|---|---|---|
| Avg. Annual Family Premium | $26,054 | $26,993 |
| Avg. Single Coverage Deductible | $2,631 | $1,886 |
| Workers Facing $2,000+ Single Deductible | 53% | — |
| Workers Facing $3,000+ Single Deductible | 36% | — |
| Projected 2026 Employer Cost Increase | 6.5%–9% | 6.5%–9% |
Key Insights
- Workers at small firms carry deductibles averaging $961 more per year than workers at large firms, a gap that shapes both recruitment decisions and total compensation costs for small healthcare practices competing for clinical talent
- 59% of employers will make cost-cutting changes to their health plans in 2026, up from 48% in 2025, per Mercer's survey of 1,700+ U.S. employers, meaning many employees at small practices will face higher premiums and higher cost-sharing in the same year
Healthcare Operating Expense Breakdown (2025)
Healthcare businesses carry a cost structure that sets them apart from most other small business categories. Labor dominates the expense ledger at 60% of total operating costs, while supplies and pharmaceutical spending each grew faster than revenue in 2025, adding upward pressure to an already strained cost structure. The AHA's 2026 Costs of Caring Report provides the most detailed sector-wide view of how healthcare businesses allocate operating budgets. Our analysis below pairs that breakdown with year-over-year growth by category.
Share of total operating expenses. Orange figure shows 2025 year-over-year growth.
| Cost Category | Share of Total Expenses | 2025 YoY Growth |
|---|---|---|
| Workforce / Labor | 60% | +5.6% |
| Supplies | 18% | +9.9% |
| Drugs / Pharmaceuticals | 9% | +13.6% |
| Other (Technology, Admin, Cybersecurity) | 15% | Varies |
Key Insights
- Drug costs grew four times faster than hospital price growth in 2025, placing acute cash flow pressure on any practice that manages pharmaceutical supply as part of its service model
- Technology and cybersecurity now demand sustained capital investment; hospitals spent roughly $30 billion on cybersecurity protections alone in 2025, a category that scales down to small practices through EHR compliance costs and data protection requirements
Common Healthcare Capital Investment Costs (2026)
Capital expenditures for healthcare practices span a wide range, from diagnostic equipment to full practice acquisitions, and the ticket size on most categories far exceeds what operating cash can absorb without disrupting liquidity. Understanding typical cost ranges helps practices evaluate the right financing structure before committing to a lender. The table below shows common investment categories and the financing fits that align with each for small healthcare businesses in 2026.
| Investment Category | Typical Cost Range | Common Financing Fit |
|---|---|---|
| Diagnostic Imaging Equipment | $50,000–$500,000+ | Equipment Financing |
| Surgical Navigation Systems | $215,000–$350,000 | Equipment Financing / Term Loan |
| EHR and Technology Systems | $15,000–$500,000 | Line of Credit |
| Facility Renovations or Expansion | $50,000–$1M+ | Term Loan |
| Payroll and Staffing Bridge | Varies | Cash Flow Financing |
| Practice Acquisition | $250,000–$5M+ | Term Loan / Private Credit |
Key Insights
- Equipment and technology represent the highest single-transaction costs for most small practices, and financing these purchases over a structured term preserves working capital while keeping the equipment operational from day one
- SBA 7(a) loans cap at $5M, which limits options for multi-site expansion or larger acquisitions; National's Term Loans and Direct Funding solutions reach up to $15M, covering projects that traditional programs cannot fully finance
Healthcare Financing Access by Lender Type (2026)
The Federal Reserve's 2026 Report on Employer Firms found that 86% of small businesses use financing regularly, with loans and credit cards as the most common instruments. For healthcare businesses specifically, lender type determines both approval speed and structural flexibility, two factors that carry particular weight when capital decisions must align with insurance reimbursement cycles and equipment delivery timelines that leave little room for funding delays. The table below compares lender types for small healthcare businesses in 2026.
| Lender Type | Reported Approval Rate | Funding Speed | Max Loan Amount | Best Use Case |
|---|---|---|---|---|
| Small Banks | 57% (fully approved) | 30–60 days | Up to $5M | Established practices, real estate |
| SBA 7(a) Programs | Varies | 30–90 days | $5M | Equipment, working capital |
| Online / Alternative Lenders | Varies | 1–7 days | Varies | Short-term working capital |
| Direct Lenders (e.g., National) | Varies | 1–3 days | Up to $15M | Equipment, growth, acquisitions |
Key Insights
- Small bank full-approval rates of 57% reflect the value of established relationships, but 30–60 day funding timelines may not support urgent capital needs in healthcare, where equipment delays directly affect patient care capacity
- Direct lenders with healthcare-specific advisor models can fund in 1–3 days and accommodate amounts that exceed SBA caps, giving practices more flexibility to structure capital around their revenue cycle rather than a lender's schedule
Further Reading
- Medical Practice Loans: Everything You Need to Know
- Top Medical Equipment Financing Companies: 2026 List
- Top Medical Practice Financing Companies: 2026 List
- Can I Get a Loan to Purchase Medical Equipment?
- Medical Financing Solutions for Professionals
Healthcare spending will continue to grow, and the capital needs that come with operating, upgrading, or expanding a practice will grow with it. National's advisors work directly with healthcare business owners, evaluating the business's capital needs and growth objectives before recommending a Term Loan, Line of Credit, Cash Flow Financing, or another structure that fits the moment. To request a PDF copy of this report with all data tables and source citations, talk to an advisor today.
Sources
- CMS National Health Expenditure Fact Sheet
- Milliman Medical Index 2026
- KFF 2025 Employer Health Benefits Survey
- American Hospital Association: 2026 Costs of Caring Report
- Mercer: Employers Prepare for Highest Health Benefit Cost Increase in 15 Years
- Federal Reserve: 2026 Report on Employer Firms
- CHCF: National Health Spending Almanac 2025
- Flychain: Complete Guide to Healthcare Practice Financing Options 2026
- SBA: 7(a) Loans
ABOUT THE AUTHOR
Joseph Camberato is the CEO & Founder of National Business Capital, where he has led the company in funding more than $3 billion for growth-minded businesses since 2007. With firsthand experience building NBC from a startup into a national private lender, Joe writes on the economic forces shaping access to capital, including interest rate shifts, private credit trends, and the challenges mid-sized companies face when banks pull back.
