Health Affairs recently reported on health spending projections through 2017, and the next decade is characterized by steady growth and a particular strength in public spending as baby boomers begin to enroll in Medicare.
Health spending is reported to have increased 6.7% to $2.2 trillion in 2007, and that figure is expected to climb to $4.2 trillion in 2017. Of the 6.7%, price growth is expected to contribute 3.8 percentage points. Healthcare spending is expected to outpace GDP growth by almost 2%, as overall economic growth is expected to increase by 4.7% during the projection period. By 2017, health spending should represent 19.5% of the GDP (compared to 16.3% in 2007.)
Private and public spending will fare differently over the projection period, with private spending expected to decelerate from 6.6% growth in 2009 to 5.9% by 2017. Public spending, however, will be bolstered by baby boomers' enrollment in Medicare toward the end of the projection period and average 7.2% annual growth, with Medicare alone averaging 7.4% growth. By 2017, Medicare spending is projected to account for 20.7% of healthcare spending.
These growth numbers bode well for the industry, though what happens with funding remains to be seen - the latest reports from CMS suggest that the agency will run out of money by 2019.
