CMS Estimates Spending Until 2017
Projections from the Centers for Medicare and Medicaid Services (CMS) about expected healthcare spending during the next ten years were published in the journal Health Affairs.
The federal report crafted by a team from CMS notes that overall healthcare spending may double in the next ten years, reaching $4.3 trillion annually. The projection marks healthcare spending in the States at one-fifth of gross domestic product (GDP). That is compared to 16.3 percent of GDP, which was the percent of GDP spent on healthcare during 2007.
Of the overall figure cited, one-fifth of that total will be spent by Medicare. And almost $2 trillion of dollars spent will come from government spending. Increasingly, healthcare costs are expected to be shifted to government agencies, especially federal and state.
Many of these increases in the government’s share of healthcare spending are attributed to the aging Baby Boomers, who will start to become Medicare-eligible. Medicare spending during 2007 tallied $427 billion. This is expected to rise to $844 billion by 2017. Along with this increase, researchers suggest that enrollment in the private arm of Medicare will grow. Cost increases are associated with such, as the private arm is more costly for the government.
The counterpoint is that private healthcare spending is expected to decrease during this time period. Data suggests private spending will be down to 5.9 percent by 2017, from 6.6 percent in 2009.
Other statistics included in the report notes that healthcare will continue to outpace general economic growth. Healthcare is expected to grow at a rate around 6.7 percent, this is 1.9 percent higher than general growth. This rate of growth noted in healthcare spending is the same that was during both 2006 and 2007.
The increases in overall healthcare spending are attributed to increasing prices for medical care and increased use of the healthcare system. Other factors noted include the growth of the U.S. population and the changing demographic face of such.
Similar reports have recently come forth from the Congressional Budget Office, as well as the General Accountability Office. Findings from the CBO report were published on HospitalBuyer in early February. As well, the CMS also issued a report describing the increases in healthcare spending for both Medicaid and Medicare during 2006, also detailed on HospitalBuyer.
March 7, 2008 Related topics: Finance, Industry & Market