How do you read today's news that the growth of U.S. health care spending slowed in 2008 to its lowest level in 48 years?
What is significant in these numbers, and what do they mean for health care reform?
The Centers for Medicare and Medicaid Services released their findings today, and officials there wrote their analysis in the journal Health Affairs.
National health spending was $2.3 trillion in 2008, an increase of 4.4 percent from the previous year. By comparison, health spending grew 6 percent in 2007. The calculation includes spending for health care goods and services, program administration, private health insurance, public health, and the amount spent on structures, equipment and noncommercial research.
Federal health care spending actually increased, partly because the federal government stepped in to pay a larger share of Medicaid costs. Medicare spending also grew more rapidly in 2008 than in 2007.
The federal government's share of national health care spending grew by 1 percentage point to 35 percent. Moreover, more of the gross domestic product went to health care spending. In 2008, 16.2 percent of the GDP was spent on health care, up from 15.9 percent in 2007.
The GDP finding was expected, according to CMS, because GDP typically grows at a slower rate than total health spending during or after a recession. Indeed, the 2008 experience is consistent with past recessions.
Spending growth for hospital services was the slowest since 1998. While prices were down, so was Medicaid spending, as states implemented strategies to lower their spending on the program. The slower growth was partially offset by increased use of inpatient and outpatient services.
The growth of spending for physician services, nursing home services and retail prescription drugs was also down, and private health insurance premiums and benefits grew at their slowest rate since 1967, according to CMS.