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Growth in health care spending remains at moderate pace
January 21st, 2013
WASHINGTON – Although U.S. health care spending climbed to $2.7 trillion in 2011, as a share of the economy it remained stable for the third consecutive year, according to Obama administration figures.
The rate of increase in national health care expenditures, 3.9% in 2011, was the same as in 2009 and 2010, resulting in the lowest annual rates recorded in the 52 years the government has been collecting such data.
Still, federal officials expressed uncertainty over whether the low growth in health spending represented the start of a trend or reflected the continuing effects of the recession.
Health and Human Services Secretary Kathleen Sebelius said that “the statistics show how the Affordable Care Act is already making a difference” in saving money for consumers.
Although the figures are encouraging, the data also showed that the amount spent to treat individuals (as opposed to spending on administration and insurance premiums) began to rise in 2011 — an indication that cutbacks in health spending have yet to become permanent.
Growth in spending on doctor visits and prescription drugs rose in 2011, while hospital spending continued to slow. Total spending for doctors’ services rose 3.6% in 2011, to $436 billion, while spending for hospital care increased 4.3% to $850.6 billion.
Spending on prescription drugs at retail stores reached $263 billion in 2011, up 2.9% from 2010, when growth was a mere four-tenths of 1%.
Federal officials said the increase in 2011 resulted partly from rapid growth in prices for brand name drugs.
Prices for specialty drugs have increased at double-digit rates in recent years. In addition, spending on new brand name drugs (those arriving on the market in the previous two years) more than doubled from 2010 to 2011, driven by an increase in the number of new medicines.
Next year Americans are expected to use more health services when millions gain health insurance and greater access to medical care as part of the federal health care overhaul. Although some provisions of the law have taken effect, the report said “their influence on overall health spending through 2011 was minimal.”
According to the analysis, health spending grew more than 5% each year from 1961 to 2007, rising at double-digit rates in some years — including every year from 1966 to 1984 and from 1988 to 1990. The report did not forecast the effects of the new health care law on future spending. Some provisions of the law, including subsidized insurance for millions of Americans, could increase spending, officials conceded.