Growth in national health expenditures in the United States in 2009
— projected to have reached $2.5 trillion and grown 5.7% — is
expected to have increased faster than the growth in the gross domestic
product, according to a new report issued by the Centers for Medicare and
Medicaid Services.
In 2009, national health expenditures increased from 4.4% in 2008,
whereas gross domestic product (GDP) is anticipated to have declined by 1.1%.
The 2009 increase was the largest since the National Health Expenditure
Accounts began tracking the figure in 1960, according to the report. As a
result of the national health expenditures growth outpacing GDP growth in 2009,
the health share of GDP is expected to have increased from 16.2% of GDP in 2008
to 17.3% in 2009.
Experts attributed this rise, in part, to the economic recession,
elevated unemployment rates, changing demographics, baby boomers entering
Medicare and faster growth in the use of health care services such as treatment
sought for influenza A (H1N1).
Of note, health spending estimates for 2009 represent projections, as
data for all of calendar year 2009 are not yet available.
In 2010, national health expenditure growth is expected to decelerate to
3.9%, and GDP is anticipated to rebound to 4% growth. Much of the projected
slowdown may be attributed to a deceleration in Medicare spending growth (1.5%
in 2010 vs. 8.1% in 2009), spurred by a 21.3% reduction in Medicare physician
payment rates called for under sustainable growth rate provisions.
Under a scenario in which sustainable growth rate provisions are revised
and physician payment rates remain at 2009 levels, total health spending is
projected to grow 4.7% (0.8% faster than under current law) and total Medicare
spending by 5.1%.
Private spending in 2010 is projected to grow just 2.8%.
The projection period of 2009 to 2019 detailed in the report showed a
growth of 6.1% in average annual health care spending — a figure that is
expected to outpace the average yearly growth of the economy by 1.7%. National
health spending is expected to rise to $4.5 trillion by 2019 and encompass
19.3% of the GDP. Moreover, public spending is projected to grow fasting than
private spending, and the public share of total health care spending is
expected to rise from 47% in 2008 to more than 50% in 2010 and 52% by 2019.
The report detailed opposite trends in spending growth for Medicare and
Medicaid projected to have occurred in 2009. Medicare spending is projected to
have risen 8.1% in 2009 ($507.1 billion), and Medicaid similarly rose 9.9%
($378.3 billion). The researchers attributed these changes to slower growth in
the hospital setting and rapidly increasing Medicaid enrollment during the
recession. From 2009 to 2019, Medicare and Medicaid spending growth rates are
projected to average 6.9% and 7.5%.
Spending on private insurance premiums is estimated to have increased
3.3% to $808.7 billion in 2009 — an increase that can be partly attributed
to the reduced number of Americans with health care coverage caused by job
losses.
Out-of-pocket spending growth estimates showed a 2.1% decrease ($283.5
billion), down from 2.8% in 2008. Between 2009 and 2019, out-of-pocket spending
growth is projected to average 4.8%.
Average public spending growth rates for health care (ie, hospital,
physician, clinical services, prescription drugs) are projected to surpass
private spending growth during the initial four years of projections. By 2012,
more than 50% of all U.S. health care spending is predicted to be generated
from public spending. Spending growth for hospital services (up 5.9% to $750.6
billion), physician and clinical services (up 6.3% to $527.6 billion), and
prescription drugs (up 5.2% to $246.3 billion) is expected to have increased
significantly in 2009.
Two significant events have the potential to sway these projections,
according to the report.
“How quickly economic growth rebounds, and to what extent, will
affect the growth of health care spending over the next decade. Second,
Congress is deliberating legislation that could greatly affect the health care
system.”
Find detailed projection data on the CMS Web site.
Truffer JT. Health Affairs.
2010;doi:10.1377/hlthaff.2009.1074.
