Are the national health expenditure numbers released by the government today as bad as they sound? Which is the most important indicator to watch? Percent of GDP? Per capita spending? The shift from private to public spending? Which sectors of the industry should we be carefully watching for jumps in spending?
Spending in 2009 grew to 17.3 percent of GDP, marking the single largest annual increase in at least 50 years, according to CMS. Spending could consume 19.3 percent of GDP by 2019. Total U.S. health care spending is estimated to have been $2.5 trillion in 2009, up 5.7 percent from the year before.
The Centers for Medicare and Medicaid Services' Office of the Actuary released the data and wrote the report for Health Affairs. The findings do not account for any changes that health care reform legislation now under consideration might achieve.
The economic recession has affected both public and private health care spending as more people have lost their private insurance and government has been hit with increases in Medicaid enrollment and therefore spending. While public spending grew 8.7 percent from 2008 to 2009, private spending grew by a smaller 3 percent.
Looking forward, health spending is projected to annually outpace growth in the GDP by about 1.7 percentage points. Through 2019, public spending is expected to grow at an average of 7.0 percent a year, and private spending at a lower 5.2 percent.
The growth of Medicare spending is estimated to have slowed a little in 2009, increasing by 8.1 percent -- half a percentage point less than the previous year. The authors attribute the change to slower growth in prescription drug and hospital spending.
Overall, however, total health care spending on most medical services increased. Spending on hospitals increased 5.9 percent last year from the year before -- up from 4.5 percent growth in 2008, mostly because of increased enrollment in Medicaid. Growth in private hospital spending also accelerated, however.
Spending on physician services also was up, again driven by additional Medicaid enrollment. That spending grew 6.3 percent in 2009, up from 5.0 percent a year earlier. Private spending on physician care also increased, however, due in part to the swine flu outbreak.
Spending on prescription drugs grew at an estimated 5.2 percent in 2009, significantly more than the 3.2 percent increase of 2008. The authors attribute the growth to the need for anti-viral drugs to combat swine flu and to higher price growth in brand-name drugs.