U.S. Projects Health Care Spending To Double by 2017

CAL/AAEM News Service calaaem_news at yahoo.com
Tue Mar 11 12:34:47 PDT 2008


U.S. Projects Health Care Spending To Double by 2017

Source: The California Healthline ( http://www.californiahealthline.org )
Date: February 26, 2008

  
U.S. spending on health care is expected to double by 2017, reaching $4.3 trillion and
accounting for nearly 20% of the gross domestic product, according to a CMS study
published on Tuesday in Health Affairs, the Washington Post reports. Health care spending
accounted for 16.3% of GDP in 2007 (Washington Post, 2/26). 

Health care spending is expected to increase by an average of 6.7% annually over the next
decade, 1.9 percentage points higher than the general economy each year, according to the
study (Wall Street Journal, 2/26). Overall, health spending per person will cost about
$13,101 in 2017, up from $7,026 in 2006, CMS projected (Freking, AP/Houston Chronicle,
2/25). 

Private spending on health care will grow annually by 6.6% in 2009 and slow to 5.9%
annually in 2017 as the population ages and enrolls in Medicare, according to the report
(Zhang, Wall Street Journal, 2/26). 

Spending by federal and state governments will increase to 49% of total health
expenditures in 2017, up from 46% in 2006 (AP/Houston Chronicle, 2/25). 

The report projected that Medicare spending will increase to $844 billion in 2017,
compared with $427 billion in 2007. 

In addition, about 16.4% of Medicare beneficiaries in 2006 were enrolled in private
Medicare plans -- which tend to cost the government more -- and 27.5% of beneficiaries
are expected to be enrolled in private Medicare plans by 2017, according to the report
(Wall Street Journal, 2/26). 

Medicaid spending is expected to more than double from $338 billion in 2007 to $717
billion in 2017 and is expected to account for one-sixth of U.S. health care spending by
that time, according to the report (Baltimore Sun, 2/26). 

The report found that the "impact of the population aging is expected ... to have a
substantial influence on the public share of spending growth, as the leading edge of the
baby-boom generation becomes eligible for Medicare" (Wall Street Journal, 2/26).

 
Other Spending
 

The report predicted that U.S. prescription drug spending would increase to $1,537 per
person by 2017, up from $761 per person in 2007. Individual spending on prescription
drugs will stay the same at about 18% of total drug costs, while the share covered by
private insurance will decrease from about 41% to 33%. 

The amount covered by public insurance will increase from 40% to 49% in 2017, the report
found (Baltimore Sun, 2/26). 

Out-of-pocket consumer spending will increase by 6% by 2017, from $269.3 billion in 2007
to $464.3 billion, according to the report. 

In addition, hospital spending, which increased from 7% in 2006 to 7.5% in 2007, is
expected to slow to 6.4% over the next decade because of a decreased demand for services
corresponding with a slower growth in income (Newark Star-Ledger, 2/26). 

Researchers also predicted that in-home care approximately will double from $178 per
person in 2007 to $343 per person in 2016. However, spending on nursing home care is
expected to increase by about 55% from $421 per person in 2007 to $652 per person in
2016.

For more information, please visit:
http://www.californiahealthline.org/articles/2008/2/26/US-Projects-Health-Care-Spending-To-Double-by-2017.aspx?topicID=37


Abid Mogannam &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service
University of California, Irvine

The CAL/AAEM Archives are available at: http://maillists.uci.edu/mailman/public/calaaem/



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