Report: Health care spending rate increases faster than rest of economy — again
February 5, 2010 by Carol KatarskyPosted in: Finance, Health Care Reform, In this week's e-newsletter, Insurance, Latest News & Views, Medicare/Medicaid
It’s no surprise to hear that health care is an increasingly large part of the U.S. economy. But the most recent estimates from CMS drive home just how much health care is outpacing other industries. In 2009, health care spending was 17.3% of the gross domestic product according to a report just released by CMS.
Health care’s share of the economy increased 1.1% over 2008’s figures. That may not sound like much, but that’s the biggest increase since CMS started tracking the data in 1960.
Spending by governments (federal, state and local) was up 8.7% — compared to 3% growth for spending by employers, insurers and individuals.
2019 outlook
The report predicts that by 2019, health care spending will represent a whopping 19.3% of the country’s economy and will cost $2 trillion more than it did in 2009. Of that, 52% will be paid by the government.
The report did not take into account possible effects of current health care reform proposals.
Tags: CMS, economy, Health Care Reform, health care spending, Insurance
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February 10th, 2010 at 5:43 pm
Well, lets take a closer look at the numbers. One, the economy is not exactly the most robust thing going and its been that way for over 18 months. We also know that some of the larger volume contributors such as auto and home sales are depressed not to mention personal spending. So when you consider people are still getting sick and maybe more sick due to the economy, health care may not be on the same trend line as the rest of the industries. So if three of the economic indicators are flat, it shouldn’t be a huge surprise that health care has grown as a percentage of. Two, we are still an aging society with more baby boomers moving into higher health care utilization every day. That doesn’t even mean over utilization, just more people using it. If you want to see who is raising fees at record pace, check out higher education. They seem to have no knowledge of CPI and how the rest of us get it used on us for raises and COLAs. I am hearing requests for 9% to 10% funding increases in our state.