Friday, January 7, 2011

Health Spending Slows, Recession to Blame

By Emily P. Walker, Washington Correspondent, MedPage Today

Spending on healthcare grew at its slowest rate in 50 years, mostly because of recession-fueled cutbacks by businesses, governments, and households, according to a Centers for Medicare and Medicaid Services report.

The growth in healthcare spending has slowed every year since 2002, but 2009's was particularly pronounced -- growing at a rate of 4%, down from 4.7% in 2008, according to the authors of the agency's annual health spending report, published in Health Affairs.

Economic recessions do not always lead to a slowdown in healthcare spending, Anne Martin, a CMS economist and lead author told reporters at a press briefing.

Despite the slowdown in the growth rate, the U.S. still spends $2.5 trillion on healthcare, or $8,086 per person.

And if the rate of growth in spending has slowed, healthcare's share of the nation's gross domestic product (GDP) -- 17.6% -- took its largest one-year increase in the five-decade history of the CMS report.

The largest chunks of the $2.5 trillion spent on healthcare in 2009 went toward hospital care, followed by physician services, then prescription drugs.

One-sixth of the nation's financial resources went to pay for healthcare, and more than half of all taxes collected paid for healthcare, said Martin.
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