Healthcare Spending Decelerates with Recession
BY LAUREN UZDIENSKI, JANUARY 11, 2010
According to new data from HHS, Americans spent $7,681 per person on healthcare in 2008 and $2.3 trillion in total. This represents a slowdown from the prior year, with spending increasing 4.4% in 2008, down from 6% growth in 2007. The slowdown can be attributed to the recession and the broader contraction of the economy, with the New York Times noting that healthcare spending didn't slow as much as other sectors.
The report raises questions about cost containment, with a CMS official stating that healthcare spending is increasing at an "unsustainable rate." One of the objectives of healthcare reform is curbing the growth of healthcare costs, though the Congressional overhaul package is estimated to cost just under $900 billion, and Republican opposition to the legislation has argued that the program doesn't do enough to contain spending.
Other highlights from the HHS report:
- Total health spending now equates 16.2% of the GDP. In 2007, healthcare comprised 15.9% of the GDP.
- Medicare spending increased 8.6% in 2008, up from 7.1% growth in 2007.
- Physician and clinical services spending increased 5.0% in 2008, slowing from 5.8% in 2007.
- Spending for other professional services, including chiropractors and podiatrists, slowed to 5.6% in 2008 from 6.5% in 2007.
- Dental services spending decelerated to 5.1% in 2008 from 6.2% in 2007.
