Cath Lab Digest

Increases in total national healthcare costs have slowed
along with the rest of the economy, but health spending continues to grow
faster than gross domestic product (GDP). New National Health Expenditure
Accounts (NHEA) data released by the Centers for Medicare & Medicaid Services
(CMS) show that health spending in the United States grew by 4.4% in 2008, and
the portion of GDP devoted to healthcare continues to increase. Meanwhile, the
number of new pharmaceuticals approved by the US Food and Drug Administration
(FDA) remained stable in 2009, and spending on prescription drugs grew at a
reduced pace.

NHEA data on total annual spending include the cost of
public and private health insurance and program administration as well as
investments in healthcare research, infrastructure, and equipment. The findings
were reported by CMS’ Office of the Actuary and published in the health policy
journal Health Affairs [2010;29(1):147-155]. In the report, the economic
recession is defined as having begun in December 2007.

According to CMS, the total sum of health spending in the
United States was $2.3 trillion or $7681 per person in 2008. This was the
slowest rate of growth since CMS started officially tracking expenditures in
1960. Despite slower growth, however, healthcare spending continued to outpace
growth in GDP, which increased by 2.6% in 2008. By 2018, CMS predicts that
national health spending will reach $4.4 trillion and comprise about 20% of
GDP.

In response to CMS’ report, the health insurer trade
association put the findings in the context of healthcare reform efforts that
have dominated the debate on healthcare costs. “The latest national health
expenditure data demonstrate why healthcare reform needs to include a long-term
strategy to reduce the growth of healthcare costs. Healthcare spending
continues to rise faster than the economy as a whole, further straining family
budgets and crowding out of other urgent domestic priorities, such as
education, energy, and the environment,” said Karen Ignagni, president and CEO
of America’s Health Insurance Plans.

The 4.4% growth in 2008 was down from 6.0% in 2007, as
spending slowed for nearly all healthcare goods and services, particularly for
hospitals (4.5% in 2008; 5.9% in 2007). However, health spending as a share of
the nation’s GDP continued to climb, reaching 16.2% in 2008 compared with 15.9%
in 2007. CMS officials said that larger increases in the health spending share
of GDP generally occur during or just after periods of economic recession.

The economic downturn significantly impacted health spending
as more Americans could not afford to spend their limited resources on
healthcare and instead went without care, CMS said in a statement. This led to
slower growth in personal healthcare paid by private sources of funds, which
increased only 2.8% in 2008. The recession also made it difficult for many
Americans to afford private health insurance coverage, leading to lower growth
in private health insurance benefit spending, which slowed to 3.9% in 2008. CMS
further explained that the subset of national spending devoted specifically
toward the purchase of healthcare goods and services, called personal
healthcare spending, increased by 4.6% in 2008.

CMS administrators also used the release of health
expenditure data to stump for reform. “This report contains some welcome news
and yet another warning sign,” said Jonathan Blum, director of CMS’ Center for
Medicare Management. “Healthcare spending as a percentage of GDP is rising at
an unsustainable rate. It is clear that we need health insurance reform now.”