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Report: National health expenditures increased faster than GDP in 2009

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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%.

Detailed projection data can be found on the CMS Web site at www.cms.hhs.gov/NationalHealthExpendData/03_NationalHealthAccountsProjected.asp.

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