Healthcare costs rise, but rate of increase slows
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
As government officials prepare to meet today to begin the laborious task of melding two different congressional healthcare bills, a new report shows that the cost of healthcare in 2008 increased, but by the smallest rate in almost half a century.
According to an analysis prepared by economists at the government’s Centers for Medicare and Medicaid and published in today’s Health Affairs journal, total national health spending grew 4.4% in 2008, the slowest rate of increase since the centers began tracking such numbers in 1960. The growth rate in 2007 was 6%.
Despite the slowdown, national health spending reached $2.3 trillion, or $7,681 per person, and the healthcare portion of gross domestic product grew from 15.9% in 2007 to 16.2% in 2008, the report noted.
Led by President Obama, government officials have made bending the cost curve on healthcare one of the key steps in the proposed healthcare reform legislation. The House and the Senate have passed different bills that must be reconciled before the president gets a final version to sign. Obama is scheduled to meet with congressional leaders today to discuss the bills.
It is unclear how much either of the bills will cut healthcare costs, with Republicans insisting that neither bill will do much to curb expenses while increasing access to healthcare insurance to most Americans.
The new numbers fit the general pattern of what happens during an economic slowdown, where the rate of growth slows but healthcare spending continues to grow, taking up a bigger slice of the economic pie. The growth in health costs outstripped the 2.6% increase in 2008’s GDP.
“This report contains some welcome news and yet another warning sign,” said Jonathan Blum, a top official at the centers. “Healthcare spending as a percentage of GDP is rising at an unsustainable rate. It is clear that we need health insurance reform now.”
The recession was felt in several healthcare areas. Lost jobs meant that enrollment in private health insurance declined from 196.4 million in 2007 to 195.4 million in 2008, the report said.
The recession also shifted a greater share of health spending to the federal government, which sends billions to states to pay for Medicaid costs. Medicaid enrollment in 2008 rose along with unemployment, but overall spending fell as states cut back.
--Michael Muskal
