Report: California Health Care Spending Grows, Rate Slows


Total spending on health care in California grew by almost 300% from 1991 to 2009, but the state's spending growth rate has slowed in recent years, according to a new report from the California HealthCare Foundation, the Los Angeles Times' "Money & Co." reports.

CHCF publishes California Healthline.

Report Findings

According to the report, "Since reaching its peak of 9.7% in 2003, the pace of growth in health spending has been decelerating. By 2009, towards the end of the recession, spending grew [by] 4.5%, similar to the U.S. rate of 4.6%, and the slowest pace since 1999."

The report also found that:

  • Health care spending in California per capita in 2009 was $6,238, the ninth-lowest in the U.S.;
  • Spending on health care accounted for 12.2% of California's economy, a smaller portion than most states;
  • Hospital and physician services accounted for the majority of health care spending, at 63%; and
  • Medicare and Medi-Cal, California's Medicaid program, accounted for nearly 40% of the state's health care spending, compared with 27% in 1991 (McMahon, "Money & Co.," Los Angeles Times, 5/9).
Sandra Kelly
Bruce, thanks for weighing in. But how do you reconcile what you're saying in support of Insurance Companies, when the report we're commenting on states that "California's health care spending increased by nearly 300% from 1991 to 2009" but, "...the report finds that the pace of growth has decelerated since 2003." To me this means the State of CA is paying more because of promises it's made and burdens it has taken on. I don't always agree with those burdens but I pay my taxes religiously and am included in supporting that burden separately. I'm asking why my rates are raised by 12-15% every 6 months when the pace of growth is going down. I'm also asking if the State Legislature is asking the same thing before giving the go ahead to the increases. Your answer is??
Bruce Jugan
Sandra, you ask if "large health insurers are buying off the California legislature" as the cause of rising insurance premiums. If that were true, then govt spending on health care would not be growing at uncontrollable rates. The fact is, despite underpaying doc & hosps who treat Medi-Cal & MediCare patients, the cost of health care is bankrupting the Federal govt and every state govt. Medicaid & MediCare are single payer systems-yet the govt is unable to control costs in their system. Many reasons for medical inflation (aging, sedentary, obese population; perverse payment system where docs & hosp are paid much more for acute care; medical schools which teach doctors to prescribe medication rather than to modify lifestyle; lack of empahsis on proper nutrition and excercise; fast food restaurants and people's preferences for convenient foods & taking a pill to solve health problem.) It is easy to blame the big bad insurance companies-certainly the media do. Its just not true.
Sandra Kelly
If this is true, why are health providers in California able to go to the State Legislature and declare they have to raise rates because healthcare costs have continued rising so fast in CA?? Does the State Legislature have an obligation to verify the insurance companies claims before they okay the request? Or do they just hand them carte blanche permission to hike rates? My individual insurance monthly rate was just hiked another 12%/month by Aetna in a letter that cites an estimated 13-15% increase cost of healthcare in California last year. This is the 7th hike in 4 years and I have a VERY high deductible insurance. Are Large Health Insurers buying off the California legislature?????

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