(Shirley Li/Medill)
WASHINGTON – Government and private spending on health care remained flat in 2010, with health insurance accounting for the largest single cost, according to a study released Monday by the Centers for Medicare and Medicaid Services.
At their first semi-annual meeting, members of the CMS’ National Health Statistics Group highlighted the stable yet strikingly low rates for 2010 health care spending in their annual study of national health expenditures.
Health sector spending as a whole hit a historically low point between 2009 and 2010, following what economist Anne Martin called “the worst recession that the U.S. has experienced since the Great Depression
“National health spending grew at a rate of 3.9 percent in 2010, up only 0.1 percent from 2009’s rate, one of the slowest growth rates in the history of the survey.
However, some of the measurements showed no growth at all: Health spending as a share of gross domestic product slowed to a halt, remaining at 17.9 percent for the second year in a row.
“We are becoming increasingly conscious of a very sharp slowdown in health spending that has set in over the last several years,” said Susan Dentzer, editor-in-chief of Health Affairs, a nonpartisan, peer-reviewed health policy journal. “Of course everybody is wondering exactly what is driving that. Is it the weak economy… or something else altogether different from that?”
According to Martin, the economy did have an impact.
“Growth in health spending is usually faster than the growth of the overall economy during a recession, therefore it takes up a larger part,” said Martin.
But due to the overall economic decline, the health sector still grew at a historically low rate.
The largest component – 72 percent — of the nation’s health dollar in 2010 went to health insurance. Of that about half was private insurance payments and the other was coverage provided by the government-funded Medicare and Medicaid programs as well as veterans’ and military health care.
Households’ share of total health care spending in 2010 decreased slightly from 29 percent to 28 percent, “a historic low in terms of share,” said statistician David Lassman. Businesses’ share of the total spending also dropped slightly, by 2 percent, to 21 percent of the overall spending.
“[All of] these entities sponsor health care payments through insurance premiums, direct out-of-pocket expenditures and dedicated or general taxes,” said Lassman. “Not surprisingly…the federal share of annual growth was larger than businesses, households, and state and local governments.”
The 2010 report from the National Health Expenditure Accounts team will be published in the January edition of Health Affairs.
Photos and info-graphic by Shirley Li/Medill.
