Healthcare News & Insights

Health spending up, but starting to slow

U.S. health care spending grew by 4.4% in 2008 — almost twice as fast as overall economic growth — but that’s actually a decelerated pace compared to prior years. 

That 4.4% is the slowest rate of growth since CMS started tracking it in 1960. The major cause: the recession. Many people have forgone or delayed health care treatment due to a lack of funds, and many of those laid off lost health insurance.

In addition, a reduced number of new prescription drugs slowed down prescription spending, which grew by “only” 3.2% in ’08.

Here’s a breakdown of spending trends by sector:

  • Hospital spending grew by 4.5%, down from 5.7% in 2007.
  • Physician and clinical service spending grew 5.0%, down from 5.8%.
  • Nursing home and home health services spending great 4.6%, down from 5.8%.
  • Public program spending (Medicare, Medicaid, etc.) grew 6.5% — same as in ’07.
  • Private health insurance premiums grew 3.1%, down from 4.4%.
  • Private spending (i.e., patient out-of-pocket expenses) was up just 2.6%, down from 5.6%.

CMS has the full report.

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  1. […] to the report by CMS, in 2010, health spending grew just 3.9%, only 0.1 percentage point faster than 2009. Total health spending in 2010 was $2.6 trillion, about $8,402 per person. To date, 2009-2010 had […]

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