National health spending slows

March 24, 2010
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Growth in national health spending slowed in 2008 to 4.4 percent, down from 6 percent in 2007 and marking the slowest growth rate since the Centers for Medicare & Medicaid Services began keeping track in 1960.

The nation spent $2.3 trillion, or $7,681 per person, for 2008, the latest year for which CMS had statistics analyzed.

The figures, released in January in the journal Health Affairs, still outpaced the Gross Domestic Product, which was 2.6 percent for 2008. Health spending as a proportion of the GDP continued to increase, reaching 16.2 percent in 2008, according to a CMS press release.

The CMS attributed the slower growth in spending to the recession, noting that Americans were delaying care and less able to afford private insurance.

A separate study from the Center for Healthcare Research & Transformation, funded by the University of Michigan and Blue Cross Blue Shield of Michigan, released in December indicated that, in general, health care spending in Michigan has grown at a slower pace than nationally.

The CMS study showed that across the U.S., spending on hospital care grew by 4.5 percent to $718.4 billion in 2008, the slowest rate of growth since 1998. The CHRT report indicated that average expenses per hospital day in Michigan in 2007 ranked 28th in the country.

The amount spent on physician and clinical services grew by 5 percent, down from a 5.8 percent growth rate in 2007.

Per capita use of prescription drugs declined slightly, the CMS reported. Spending growth on prescriptions amounted to 3.2 percent in 2008.

Nationally, spending by public programs, including Medicare and Medicaid, shot up by 6.5 percent during the year. In 2008, Michigan physicians fees for Medicaid services were 63 percent of the rate paid by Medicare, ranking 44th on a national list and tied with Maine, Illinois and Florida, according to the CHRT study.

The CHRT study indicated that in 2006, 5.1 percent of Michiganders’ personal health care expenses were in emergency rooms, compared to 3.6 percent nationally. Outpatient care and office-based medical services also were higher than the national average. Michigan expenditures ranked lower than average in prescriptions, inpatient hospital care, dental and home health services.

In the CHRT study, BCBSM reported spending at $3,285 per enrollee in 2006. The study compared that to $7,860 for Medicare in 2004 and $4,199 for Medicaid in 2006. The study noted that Medicaid spending is weighted toward the high health needs of the elderly and the disabled population, and Medicare on the population age 65 and older. HQ

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