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Recession expected to affect growth in national health expenditures
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Growth in national health care expenditures in the United States in 2009 is expected to have outpaced growth in the gross domestic product, according to a recent report issued by the Centers for Medicare & Medicaid Services.
The report also details a projected increase in Medicare and Medicaid spending, and spending growth for hospital, physician and clinical services.
However, two significant events could sway these projections.
“How quickly economic growth rebounds, and to what extent, will affect the growth of health care spending over the next decade,” the Centers for Medicare & Medicaid Services (CMS) wrote in their report. “Second, Congress is deliberating legislation that could greatly affect the health care system.”
The CMS projected that the national health expenditures increased 5.7% in 2009 from 2008 estimates, while the gross domestic product (GDP) is estimated 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 a CMS press release.
CMS 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.
The group noted that health spending estimates for 2009 represent projections, because data for all of 2009 are not yet available.
In 2010, the National health expenditure is estimated to decrease to 3.9%, while the GDP is expected to grow to 4%. The CMS noted that much of the projected expenditure slowdown may be attributed to a decrease in Medicare spending due to a 21.3% Medicare physician payment cut under the sustainable growth rate (SGR).
If the SGR is revised and physician payment rates remain at 2009 levels, CMS projects that total health spending will grow 4.7% and total Medicare spending will increase by 5.1%.
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%. According to the report, national health spending is expected to rise to $4.5 trillion by 2019 and encompass 19.3% of the GDP.
The group also projected that Medicare spending rose 8.1% in 2009 and Medicaid spending increased 9.9%. In addition, they projected spending growth in hospital services (5.9%) and physician and clinical services (6.3%). They cited higher Medicaid spending growth and increased services for treating patients with H1N1 among the reasons for growth in these services.
- References:
Truffer JT. Health Affairs. 2010;doi:10.1377/hlthaff.2009.1074.
