U.S. health care spending in 2009 grew by 4% to $2.5 trillion, marking a drop of 0.7 percentage points from 2008 spending growth and representing the slowest growth on record in 50 years, according to a CMS report published on Wednesday in the journal Health Affairs, Reuters reports (Heavey, Reuters, 1/5).
Public and private health spending amounted to about $8,086 per person in 2009, up from $7,845 per person in 2008 when annual health outlays increased by only 4.7% (Pugh, McClatchy/Sacramento Bee, 1/6).
The report, issued by the CMS Office of the Actuary, attributed the slower growth to the sustained effects of the economic recession, which began in December 2007 and ended in June 2009, according to the New York Times.
Anne Martin, an economist and the report's principal author, explained, "Many consumers decreased their use of health care goods and services, partly because they had lost employer-based private health insurance coverage and partly because their household income had declined."
Martin noted that in many cases, consumers opted to "forgo health care services they could not afford" (Pear, New York Times, 1/5).
Despite the drop in the spending growth rate, health spending remained a primary part of the national economic output in 2009, rising to 17.6% of the nation's GDP from 16.6% the year before, and outpacing other key sectors of the economy, the report said (Landers, Wall Street Journal, 1/6).
Other Key Findings
The CMS report also found that Medicaid spending in 2009 increased sharply, while spending on Medicare for the year remained constant from 2008 at 7.9%.
According to Politico, Medicaid enrollment increased as a result of individuals who lost private insurance coverage (Coughlin, Politico, 1/5). Medicaid enrollment increased by 9% in 2009, compared with 4.9% in 2008 (Zigmond, Modern Healthcare, 1/5). Federal spending on Medicaid increased by 22%, partly because of a $34 billion boost in funding through the 2009 federal economic stimulus package (Politico, 1/5).
According to the report:
- Hospital spending grew by 5.1% to $759.1 billion in 2009, compared with a 5.2% growth rate in 2008;
- Physician and clinical services spending rose by 4% to $505.9 billion, down from a growth rate of 5.2% in 2008;
- Retail prescription drug spending increased by 5.3% to $249.9 billion, compared with a 3.1% increase in 2008 (Modern Healthcare, 1/5);
- Home health care spending increased by 10%, while spending on other residential and personal care increased by 8.3% (Politico, 1/5);
- Private insurance spending grew by 1.3%, even as coverage declined by 3.2%, or 6.3 million people; and
- Out-of-pocket consumer spending grew just four-tenths of 1%, compared with a 3.1% growth rate in 2008 (New York Times, 1/5).