New National Health Expenditures Analysis from CMS

A new report from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS), published in the January 2013 issue of Health Affairs, estimates that health care spending in the United States grew at a rate of 3.9 percent in 2011. That level of annual growth is identical to spending growth rates in 2009 and 2010, which means that growth in all three years has occurred at the slowest rates ever recorded in the 52-year history of the National Health Expenditure Accounts.

Total health care spending growth in 2010 and 2011 continued to track closely with the growth in nominal gross domestic product (GDP) in both years, and the health spending share of GDP stayed stable in 2011 at 17.9 percent. Yet despite the overall stability in health spending, "we observed faster growth in spending among some payers and services in 2011," said Micah Hartman, statistician in the Office of the Actuary at CMS and lead author of the Health Affairs article.

In 2011, for example, there was slower growth than in 2010 in the net cost of insurance and in noncommercial medical research. There was also a decline in spending in government public health activities. At the same time, there was faster growth in spending in 2011 than in 2010 for personal health care goods and services. Growth in this category was mainly due to an increase in non-price factors, such as the use and intensity or complexity of services.

Faster growth in personal health care spending in 2011 was also driven by increased growth in spending for retail prescription drugs and physician and clinical services, which was partly offset by slower growth in spending for hospital services. Furthermore, from a payer perspective, spending for Medicare, private health insurance, and consumer out-of-pocket payments increased faster in 2011 compared to 2010, although spending for the Medicaid program grew more slowly.

On the whole, the impact of provisions of the Affordable Care Act on aggregate health spending growth in 2010 and 2011 was minimal. However, there was some impact on certain subcomponents of national health expenditures; for example, private health insurance spending and enrollment were impacted by the provision that expanded private health insurance coverage to dependents of enrollees up to age 26.

U.S. health spending growth slows for 2nd year; totaled nearly $2.6 trillion in 2010

U.S. health care spending experienced historically low rates of growth in 2009 and 2010 according to the annual report of national health expenditures (NHE) from the Centers for Medicare & Medicaid Services (CMS) published in the January issue of the journal Health Affairs.

Analysts at CMS report that the increase in spending for 2009 represents the lowest rate of increase in the entire 51 year history of the NHE. The low rate of growth, the data show, reflects lower utilization in health care than in previous years. The report notes that U.S. health care spending grew only 3.9 percent in 2010, reaching $2.6 trillion or $8,402 per person, just 0.1 percentage point faster than in 2009.

Private businesses financed $534.5 billion, or 21 percent of total health spending in 2010, down from a 23-percent share in 2007.

Additional details and the full report can be accessed here.

Healthier Americans for a Healthier Economy

High rates of chronic diseases are among the biggest drivers of U.S. health care costs and they are harming our nation’s productivity. In fact, more than half of all Americans currently live with one or more chronic disease, including heart disease, stroke, diabetes and cancer. High rates of these diseases, which in many cases are preventable, are associated with increasing health care costs.

Recently, Trust for America’s Health (TFAH) released a report, Healthier Americans for a Healthier Economy (http://www.healthyamericans.org/report/90/), that features six case studies focused on the relationship between health and economic development. Read the full post...

Health-care groups laying groundwork for post-election debate over cost cuts

Regardless of whether Congress’s supercommittee meets its deadline for finding ways to reduce the federal deficit, budget and policy experts are braced for Washington to soon face the painful task of finding even more savings — and they anticipate that health spending, which makes up more than a fifth of the federal budget, will be a main target.

Some health-care leaders are already laying the groundwork to redirect a debate they’re expecting in 2013, after the 2012 election. They hope to prevent spending from simply being shifted from one part of the system to another. Read the full article...

Obama Administration’s regulatory reductions to save health care system nearly $1.1 billion

Scaling back outdated rules is part of Administration’s effort to cut red tape

New proposed rules released today by the Centers for Medicare & Medicaid Services would reduce unnecessary, obsolete, or burdensome regulations and save hospitals and healthcare providers nearly $1.1 billion each year and over $5 billion over 5 years. The new proposals regarding the rules for hospitals that treat Medicare and Medicaid patients were developed in response to President Obama’s call on all Federal agencies to eliminate burdensome and unnecessary regulations.

“The President and I have challenged agencies to hunt down burdensome regulations,” said Vice President Joe Biden. “Today’s steps will remove outdated, duplicative, unnecessary burdens on hospitals - saving money and improving care.” Read the full release...

Related Article:

• HHS loosens Medicare red tape as part of Obama plan - Reuters

The Specifics: How Obama Plans To Cut Health Programs By $320 Billion

In his plan to trim the federal deficit, President Barack Obama Monday proposed $320 billion in cuts to Medicare and Medicaid, largely by changing how the federal government pays health providers, slashing payments to drug companies, and dramatically changing the way it splits the costs of Medicaid with the states, according to a fact sheet the White House released. Read the full article...

What Community Health Centers Mean to Economic and Health Security

"In our current economic climate, community health centers continue to absorb rising numbers of uninsured patients, providing high-quality and affordable care while generating billions in savings to the health care system. As they struggle to meet ever-growing demands for services, our nation’s largest primary care system also faces deep cuts in federal and state aid—another byproduct of the economy. Reductions in funding for health centers threaten to erode health center capacity and jeopardize access to care for millions of Americans." Read the full post...

Analysis Examines Variations in Individual Health Insurance Premiums Across Country

This analysis examines how premiums for individual health insurance differ around the nation, finding that premiums can vary substantially from state to state. The average per-person premium in 2010 ranged in cost from approximately $136 per month in Alabama to more than $400 per month in Vermont and Massachusetts. The average across all states was $215 per member per month. Read the full analysis...

Health Spending Continues to Moderate, Cost of Reform Overestimated

A recent report from the Centers for Medicare and Medicaid Services (CMS) shows that national health spending grew at a historically low rate of 3.9 percent in 2010, almost paralleling the 3.8 percent increase in our gross domestic product (GDP) last year. This is somewhat reassuring news for the millions of American families and businesses who have struggled with the explosive growth in health insurance premiums and out-of-pocket costs over the past decade. It’s also good news for the federal government as the slowdown indicates that the cost of health reform has been overestimated. Read the full post...

The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations

The Organization for Economic Cooperation and Development (OECD) tracks and reports on more than 1,200 health system measures across 34 industrialized countries. This analysis concentrated on 2010 OECD health data for Australia, Canada, Denmark, France, Germany, Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States. Health care spending in the U.S. towers over the other countries. Download the full issue brief...