Saturday, January 8, 2011

Health Spending Rose in ’09, but at Low Rate

Total national health spending grew by 4 percent in 2009, the slowest rate of increase in 50 years, as people lost their jobs, lost health insurance and deferred medical care, the federal government reported on Wednesday.

Still, health care accounted for a larger share of a smaller economy — a record 17.6 percent of the total economic output in 2009, the report said. The economy contracted while health spending continued to grow.

The nation spent $2.5 trillion on health care in 2009, for an average of $8,086 a person, and the recession had a profound influence.

The number of visits to doctors’ offices apparently declined. Many hospitals reported fewer admissions, as patients put off medical procedures. Spending on dental services declined slightly. Many hospitals and other health care providers reduced their capital investments. Spending on doctors’ services in 2009 increased at the slowest pace since 1996, according to the new federal study, being published in the journal Health Affairs.

Partly offsetting the slowdown in private health spending was a rapid increase in Medicaid spending, driven by the addition of 3.5 million people to the rolls.

“Federal Medicaid spending increased 22 percent in 2009, the highest rate of growth since 1991,” Ms. Martin said, while “state spending decreased 9.8 percent, the largest decline in the program’s history.”

Spending on health care by private insurance companies grew a modest 1.3 percent in 2009, as the number of people with private coverage declined by 3.2 percent, or 6.3 million people. At the same time, out-of-pocket spending by consumers rose just four-tenths of 1 percent, compared with an increase of 3.1 percent in 2008.

Retail purchases of prescription drugs account for $1 of every $10 spent on health care, almost $250 billion of the $2.5 trillion total in 2009.

Medicaid spending accounted for 15 percent of all health spending and totaled $373.9 billion in 2009, the report said.

Out-of-pocket spending by consumers — which includes deductibles, co-payments and the purchase of goods and services not covered by insurance — accounted for 12 percent of all health spending and totaled almost $300 billion in 2009, the report said.

Medicare spending reached $502 billion in 2009, meaning that the program, for older Americans and the disabled, accounts for $1 of every $5 spent on health care. Enrollment in the traditional fee-for-service Medicare program declined, as some beneficiaries chose to enroll in private Medicare Advantage plans, federal officials said.

Over all, Medicare spending rose 7.9 percent in 2009, the same rate as in 2008, while enrollment grew about 2 percent, the report said.

Medicare spending increased an average of 2.3 percent for each person in a private Medicare Advantage plan and 6.9 percent for each person in the traditional program.

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