News | January 06, 2011

CMS Report Finds Recession Impacted Health Spending

January 6, 2011 - Healthcare spending in the United States grew 4 percent in 2009, to $2.5 trillion, or $8,086 per person, the slowest rate of growth in the 50-year history of the National Health Expenditure Accounts (NHEA). This was due in great part to the economic recession.

The report, prepared annually by the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary, summarizes recent trends in health spending based on the most current data sources.

The report estimates the total healthcare spending in the United States and measures annual health spending by the types of goods and services delivered, by the programs and payers that pay for that care, and by the organizations that ultimately finance that care.

The 4 percent growth in 2009 was down from 4.7 percent in 2008, which was the second slowest rate of growth on record. The recession led to slower growth in private health insurance expenditures and out-of-pocket spending by consumers, and to a reduction in capital investments. Despite the slowdown, healthcare spending growth continued to outpace overall economic growth, which declined 1.7 percent in 2009 as measured by nominal gross domestic product (GDP).

However, health spending as a share of the nation’s GDP continued to climb, reaching 17.6 percent in 2009, up 1 percentage point from 2008, the largest one-year increase in the history of the NHEA. In comparison to other recent recessions, the health spending share of GDP increased 0.7 percentage point in 1991 and 2001, and 0.8 percentage point in 1982.

The recession affected health spending as many consumers decreased their use of goods and services due to lost health insurance coverage and reduced income. This led to a deceleration in private health insurance spending, which increased only 1.3 percent in 2009 compared to 3.5 percent in 2008, that was due primarily to a 3.2 percent drop in enrollment.

At the same time, as more people became eligible for and enrolled in Medicaid, growth in that program’s spending accelerated to 9 percent in 2009 following 4.9 percent growth in 2008. With approximately $34 billion in enhanced federal aid for States, federal Medicaid spending increased 22 percent and its share of total Medicaid spending reached 66 percent (from a 59 percent share in 2008). In contrast, state Medicaid spending declined 9.8 percent – the largest decline in the program’s history.

The economic downturn also affected consumer out-of-pocket spending, which slowed to 0.4 percent growth in 2009, as spending for dental services, nursing care facilities and continuing care retirement communities, and physician and clinical services declined.

A 2.7 percent reduction in expenditures for capital investments also contributed to the slowdown in health spending. In 2009, private and state and local government providers decreased their investment in structures and equipment by 4.3 percent and 1.1 percent, respectively.

Key statistics on the growth of health care spending:

• Hospital spending increased 5.1 percent to $759.1 billion in 2009 compared to 5.2 percent growth in 2008.

• Physician and clinical services spending increased 4.0 percent in 2009 to $505.9 billion, a deceleration from 5.2 percent growth in 2008.

• Retail prescription drug spending grew 5.3 percent in 2009 to $249.9 billion, after 3.1 percent growth in 2008.

• Spending for freestanding nursing care facilities and continuing care retirement communities increased 3.1 percent in 2009 to $137.0 billion, a deceleration from growth of 5.0 percent in 2008.

• Spending for home health care services provided by freestanding facilities grew 10.0 percent to $68.3 billion following growth of 7.5 percent in 2008.

For the complete report: http://www.cms.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp#TopOfPage

Related Content

Healthcare cybersecurity concerns have increased dramatically as EMRs and medical devices become more digitally connected.

Healthcare cybersecurity concerns have increased dramatically as EMRs and medical devices become more digitally connected.

Feature | Cybersecurity| August 18, 2017 | Dave Fornell
August 17, 2017 — Cybersecurity has become a growing concern in healthcare as patient data, medical systems and impla
Houston Methodist Hospital Enters Multi-Year Technology and Research Agreement With Siemens Healthineers
News | Cardiac Imaging| August 17, 2017
Houston Methodist Hospital and Siemens Healthineers have entered into a multi-year agreement to bring cutting-edge...
ScImage Awarded U.S. Government DIN-PACS IV Contract
News | PACS| August 16, 2017
ScImage Inc. was recently awarded a new DIN-PACS IV (Digital Imaging Network/Picture Archiving and Communications...
The FDA is concerned about cybersecurity of ICDs and cyber security of other medical devices.
Feature | Cybersecurity| August 16, 2017 | Dave Fornell
There is growing concern among patients and regulators that medical devices, especially implantable electrophysiology
Xavier University Announces Healthcare Artificial Intelligence Summit
News | Artificial Intelligence| August 07, 2017
Xavier University has launched the Xavier Center for Artificial Intelligence (AI), a pioneering effort to accelerate...
Nuance Restores Service to Majority of eScription Clients Following Malware Incident
News | Information Technology| July 28, 2017
Nuance Communications Inc. provided an update on its restoration process following the previously reported June 27,...
The Centricity Cardio Enterprise (CCE) Interactive Guide offers information on GE's cardiovascular information system (CVIS)
News | Cardiac PACS| July 28, 2017
July 28, 2017 — GE Healthcare has released the eight-page...
WVU Medicine Deploys Enterprise PACS from ScImage
News | Cardiac PACS| July 24, 2017
ScImage Inc. recently announced West Virginia University Health System has partnered with ScImage to utilize ScImage’s...
TomTec Unveils TomTec Zero Cardiovascular Viewing Software
Technology | Remote Viewing Systems| July 24, 2017
TomTec Zero is the latest addition to the TomTec portfolio. Now every physician reading cardiovascular studies at...
CareSelect Declared Fully Qualified Clinical Decision Support Mechanism by CMS
News | Clinical Decision Support| July 18, 2017
National Decision Support Company announced the full qualification of its CareSelect Platform as a Qualified Clinical...
Overlay Init