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U.S. health-care spending hits nearly $2 trillion
Reuters ^ | 1/9/07 | Susan Heavey

Posted on 01/09/2007 12:50:08 AM PST by bruinbirdman

U.S. spending on health care hit nearly $2 trillion in 2005, fueled by the cost of hospital care, doctor fees and prescription drugs, government experts said in an annual report released on Tuesday.

Health-care spending grew 6.9 percent to about $1.99 trillion from about $1.86 trillion in 2004, a slower pace than the 7.9 percent increase a year earlier, the report by the National Health Statistics Group found. The increase outpaced a 3.4 percent rise in inflation in 2005.

The statistics group is part of the Centers for Medicare and Medicaid Services (CMS), the single largest payer for U.S. health care.

Leading the increase were hospital services, which grew 7.9 percent to $611.6 billion and accounted for 31 percent of all U.S. health care dollars in 2005. Rising labor costs amid a sustained worker shortage were major factors, according to the report, one of the most comprehensive available.

Doctor and clinical services rose 7 percent to $421.1 billion, while nursing home and related care went up 6 percent to $121.9 billion.

Prescription drug spending also increased 5.8 percent in 2005 to about $200.7 billion, tempered by reduced use of pain relievers such as Merck Inc.'s withdrawn arthritis drug Vioxx, the report said.

Still, medication costs contributed largely to the growing share of costs for those covered by private health insurance plans in 2005, the report said. At the same time, brand name prescription drug prices rose an average of 6 percent.

Even as the rate of growth for insurance plan premiums slowed, findings showed consumer out-of-pocket spending rose amid growing drug costs, followed by doctor and dental services.

Premium growth slowed to 6.6 percent at $694.4 billion last year, down from 7.9 percent growth in 2004 as employers added deductibles and curbed coverage instead of raising employees' share of the fees.

"These actions might slow premium growth for employers, but they ultimately increase the burden on individuals as their direct out-of-pocket costs increase," the economists wrote.

While health-care spending continued to grow last year, it was at a slower pace for the third straight year, they added, in part due to more generic drug use, changes in various therapies and fewer drug costs for the nation's poor.

Health-care costs also took up the same portion of the gross domestic product (GDP) as they did in 2004 -- about 16 percent, the report said. But it was unclear if that was a new trend.

"The current moderation in the rise of the health share of GDP indicates that at least for now, health spending is growing at a rate nearly comparable to the rest of the economy," the group said.

Additionally, spending for Medicare -- the federal insurance program for the elderly and disabled -- grew 9.3 percent to reach $342 billion last year. While slightly less than 2004's 10.3 percent growth, it still "was faster than average" compared to the previous decade, the report found.

Growth in prescription drug costs under the program rose the most -- 19.7 percent -- but made up just 1.2 percent of its total spending. That included the cost of Medicare's temporary drug cards but not the full benefit that began January 2006.

Spending for Medicaid, the U.S. insurance program for the poor, also grew 7.2 percent to $179 billion.


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
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Guess it takes a year to get all the data. Or this is an administration present to Fauxlosi and Hairy.
1 posted on 01/09/2007 12:50:09 AM PST by bruinbirdman
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To: bruinbirdman

"Oh my, my, my, my ... What are we to do? If only the Government would step in and fix everything!" (/s)


2 posted on 01/09/2007 1:06:10 AM PST by TexGuy
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To: TexGuy
Schwarzenegger wants health care for ALL in Calif

yitbos

3 posted on 01/09/2007 1:08:33 AM PST by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman
They left out the expense of treating thousands of illegals................

Wonder why!  ~barf

4 posted on 01/09/2007 2:41:08 AM PST by SheLion (When you're right, take up the fight!!!!!)
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To: bruinbirdman
U.S. health-care spending hits nearly $2 trillion

"We are not worthy! We are not worthy!"

5 posted on 01/09/2007 3:29:01 AM PST by snarks_when_bored
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To: bruinbirdman

It's obviously not a demand side problem. There is two trillion dollars of demand already. It's a supply side problem. They need to eliminate regulation that prevents people from entering or investing in the industry.


6 posted on 01/09/2007 3:36:13 AM PST by Brilliant
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To: bruinbirdman

Wouldn't these $ be better $pent on $omething worthwhile, like Globle Warming?


7 posted on 01/09/2007 4:21:09 AM PST by Waco
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To: bruinbirdman

"Leading the increase were hospital services, which grew 7.9 percent to $611.6 billion and accounted for 31 percent of all U.S. health care dollars in 2005. Rising labor costs amid a sustained worker shortage were major factors, according to the report, one of the most comprehensive available."



Too few doctors. Too few healthcare technicians. Too few nurses. Too few healthcare workers all around. So why is this? We spend more than $611 billion on them a year? We're not paying them enough?

No. The problem is that the government regulatory scheme is designed to reduce the number of people employed in this industry. The regulators have hit on the brilliant idea that the problem with the healthcare industry is that we have too many people employed by the industry. Go figure.


8 posted on 01/09/2007 4:53:04 AM PST by Brilliant
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To: bruinbirdman

"...spending for Medicare -- the federal insurance program for the elderly and disabled -- grew 9.3 percent to reach $342 billion last year."

Lyndon B. Johnson, one of America's biggest liars ever to become president, assured us that Medicare would never exceed 9 billion dollars. Think of that every time the Dem liars want to start a new program and give us their phony cost estimates. Government has run up the price of health care in the US to its current absurd level. Their cure? They want to take it over completely and run it as efficiently as they do welfare and the post office.


9 posted on 01/09/2007 4:53:34 AM PST by kittymyrib
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To: kittymyrib
Government has run up the price of health care in the US to its current absurd level.

The government ran the price up?

10 posted on 01/09/2007 4:56:57 AM PST by DungeonMaster (Acts 17:11 also known as sola scriptura.)
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To: Brilliant

Health-care spending grew 6.9 percent

Heck that's cheap! My insurance premiums went up 33% this year! And now Arnold wants me to pay more for the illegal aliens who already get free healthcare.

I am baffled.


11 posted on 01/09/2007 7:19:05 AM PST by sheana
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To: sheana

Overall, it went up by 6.9%. But notice that hospital costs went up 31%, and the primary component of that cost is labor. I can assure you that the hospitals did not increase their employment by 31%, and they certainly did not increase the amount of labor per patient by 31%. I'm sure that it's primarily a matter of paying more for the same amount of labor. And that does not happen unless the demand for labor goes up a lot faster than the supply.

The problem is that we don't have enough doctors, nurses, and medical technicians. You can increase the demand all you want, and it's not going to increase the availability of healthcare if you don't increase supply. It's just going to bid up the cost.


12 posted on 01/09/2007 7:32:20 AM PST by Brilliant
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To: Brilliant

Guess I should have used a sarcasm tag.


13 posted on 01/09/2007 7:38:34 AM PST by sheana
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To: DungeonMaster
The government ran the price up?

My brother-in-law is a contractor who does a lot of work in the million+ dollar "McMansions" that have popped-up in Florida over the past few years.

According to him, just about half oh his clients are involved in Health Care (pharma, administration, insurance, etc). Not doctors, mind you. Managers and sales reps.

I don't know who is driving up the cost of health care, but it is naive to blame the government alone.

14 posted on 01/09/2007 7:44:35 AM PST by Wormwood (Goldwater Republican.)
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To: DungeonMaster
The government ran the price up?

Yup and it started with medicare. Since then government on all levels has run up the costs with unfunded mandates, idiot restrictions on insurance ( MUST cover provisions like fertility treatment, contraception,"alternative medicine", etc etc), massive increases in documentation and paper work ( medical records departments went from a few filers to the largest deparment in most hospitals), the list of governmnet interference causing increased costs is almost endless.
15 posted on 01/09/2007 7:46:23 AM PST by Kozak (Anti Shahada: " There is no God named Allah, and Muhammed is his False Prophet")
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To: Wormwood
LI don't know who is driving up the cost of health care, but it is naive to blame the government alone.

I know, that's why I posted my question. There is very little reason to blame the government for the cost of health care, nearly none.

16 posted on 01/09/2007 8:23:36 AM PST by DungeonMaster (Acts 17:11 also known as sola scriptura.)
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To: Kozak
Yup and it started with medicare. Since then government on all levels has run up the costs with unfunded mandates, idiot restrictions on insurance ( MUST cover provisions like fertility treatment, contraception,"alternative medicine", etc etc), massive increases in documentation and paper work ( medical records departments went from a few filers to the largest deparment in most hospitals), the list of governmnet interference causing increased costs is almost endless.

The price of medication is higher because of medicare? The cost of surgery is higher because of fertility treatment coverage on insurance? Hospitals document treatment becasue it's the law and not because of the patients? I'm not very convinced by your current list.

17 posted on 01/09/2007 8:26:46 AM PST by DungeonMaster (Acts 17:11 also known as sola scriptura.)
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To: DungeonMaster

I forgot the original sin of government and health care costs.
The system of employer funded health insurance that arose during WW2 due to wage controls. That led to the initial uncoupling of demand from payment. The government THEN proceeded to make it worse with medicare etc.


18 posted on 01/09/2007 8:40:52 AM PST by Kozak (Anti Shahada: " There is no God named Allah, and Muhammed is his False Prophet")
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To: Kozak
The system of employer funded health insurance that arose during WW2 due to wage controls. That led to the initial uncoupling of demand from payment. The government THEN proceeded to make it worse with medicare etc.

So health care is expensive because some companys pay for health insurance. There is certainly no law demanding that they carry health insurance. OK, if there is then the coverage is incredibly variable from one job to the next. Health care coverage is a perk carried by employers to attract employees.

By the way, if you pay one million dollars for health insurance and never buy a band-aid, your health care cost is zero.

19 posted on 01/09/2007 8:45:05 AM PST by DungeonMaster (Acts 17:11 also known as sola scriptura.)
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To: DungeonMaster
By the way, if you pay one million dollars for health insurance and never buy a band-aid, your health care cost is zero.

No it's not. Your health care cost is 1 million. Your INSURANCE company has also made 1 million in profit.
20 posted on 01/09/2007 8:58:37 AM PST by Kozak (Anti Shahada: " There is no God named Allah, and Muhammed is his False Prophet")
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