U.S. Healthcare Bill Higher but Growth Slower
At 6.9 percent in 2005, growth in healthcare spending in the United States has declined for the third year in a row according to the Office of the Actuary at the Centers for Medicare and Medicaid Services,, though it was still growing higher than the economy as a whole. Americans spent roughly 2 trillion or 16 percent of their gross domestic product on healthcare in 2005 as opposed to 15.9 percent the previous year. This amounts to about $6,700 per person. Again this year, slower growth in prescription drug spending, especially through Medicare, was the primary factor explaining the overall trend. Home care was the fastest riser in relative terms with an 11 percent increase at $47.5 billion. Meanwhile hospital spending grew by 7.9 percent, about the same rate as in 2004. It is the highest share of national expenditures at 31 percent of the total. Hospital spending growth by private payers increased 7.6 percent, while public spending increased 8.1 percent.
The government also bragged that Medicare Part D prescription benefits would amount to less than first expected. This should not cloud the fact that costs keep climbing steadily. If growth is losing speed, so is that rate of deceleration. Private spending was more constrained than public spending though out-of-pocket payments accelerated.
Sources: Office of the Actuary highlights (pdf), Health Affairs, New York Times, UPI, LA Times. See also our coverage of the 2004 numbers.
January 10, 2007 Related topics: Trends