Tuesday
Jan052010
Health Spending Growth Rate Hit All-Time Low In 2008
Tuesday, January 5, 2010 at 11:25AM
National health spending grew 4.4% to reach a total of $2.3 trillion in 2008, according to new data released by officials with the Centers for Medicare and Medicaid Services (CMS).
However, compared to 2007, when the growth rate for health spending was 6%, the figure for 2008 was significantly lower. CMS officials attributed the slow down to after-effects of the struggling economy.
“During periods of recession we often see healthcare spending to be somewhat insulated from the impacts of that recession...but in 2008 we saw...a more immediate impact on the healthcare spending trend...most likely due to the fact that this recession is one of the most severe that we’ve seen since 1933,” said CMS statistician Micah Hartman.
In 2008, while state health spending decreased noticeably, federal health spending accounted for over one-third of total U.S. health spending, caused mainly by an 8.6% growth in Medicare. In addition, federal Medicaid spending grew 8.4%, sparked by a 2.6% increase in enrollment. These occurances were likely aided by passage of the American Recovery and Reinvestment Act, which allowed billions in health spending to be shifted from states to the federal government.
Due to a decline in private health insurance enrollment, the growth rate of private health spending slowed to 2.6% in 2008. Private health insurance plans lost roughly one million enrollees as a result of income and job loss. This in turn, sparked a slow down in the growth rate of private health premiums, which fell from 4.4% in 2007 to 3.1% in 2008.
Prescription drug spending also experienced a drop in growth, going from 4.5% in 2007 to 3.2% in 2008. Aside from the recession, cheaper generic drug prices offered by retailers such as Walmart contributed to the decline.
However, compared to 2007, when the growth rate for health spending was 6%, the figure for 2008 was significantly lower. CMS officials attributed the slow down to after-effects of the struggling economy.
“During periods of recession we often see healthcare spending to be somewhat insulated from the impacts of that recession...but in 2008 we saw...a more immediate impact on the healthcare spending trend...most likely due to the fact that this recession is one of the most severe that we’ve seen since 1933,” said CMS statistician Micah Hartman.
In 2008, while state health spending decreased noticeably, federal health spending accounted for over one-third of total U.S. health spending, caused mainly by an 8.6% growth in Medicare. In addition, federal Medicaid spending grew 8.4%, sparked by a 2.6% increase in enrollment. These occurances were likely aided by passage of the American Recovery and Reinvestment Act, which allowed billions in health spending to be shifted from states to the federal government.
Due to a decline in private health insurance enrollment, the growth rate of private health spending slowed to 2.6% in 2008. Private health insurance plans lost roughly one million enrollees as a result of income and job loss. This in turn, sparked a slow down in the growth rate of private health premiums, which fell from 4.4% in 2007 to 3.1% in 2008.
Prescription drug spending also experienced a drop in growth, going from 4.5% in 2007 to 3.2% in 2008. Aside from the recession, cheaper generic drug prices offered by retailers such as Walmart contributed to the decline.