Americans slow spending on health care

By John Fritze, USA TODAY

WASHINGTON — A decades-long boom in spending on doctors, hospitals and drugs slowed in 2008 to its lowest level, even as health care costs accounted for a greater share of the nation's economy, the federal government said in a report released Tuesday.

Health care spending rose 4.4% in 2008 to $2.3 trillion, or $7,681 per person, the smallest increase since the spending was first tracked in 1960, according to the Centers for Medicare and Medicaid Services. The report suggests the down economy forced Americans to go without care.

"During periods of recession we often see health care spending to be somewhat insulated," said Micah Hartman, a co-author of the report. "But in 2008, we saw a bit more of an immediate impact" because the decline has been so severe.

President Obama cites costs as a major reason to revamp the health care system. Lawmakers this month will begin marrying separate health care bills approved last year by the House and Senate.

The report, which also shows private insurance premiums rose 3.1% in 2008, provided ammunition to both sides of the debate. "I agree we need reform," said Rep. Dave Camp, R-Mich., "but both the House and Senate Democrat bills make the problem worse by increasing the cost of health care."

MORE: Democrats to bypass tradition on health compromise
LESSONS: A weekend of free health care
PROVE IT: Health bills could expand IRS role
COMPARING HEALTH CARE BILLS: House vs. Senate
TIMELINE: Road to health care legislation

Sen. Max Baucus, D-Mont., an architect of the Senate health bill, said the report shows costs are rising as wages decline. "Health reform is not only about ensuring health care security for more Americans, it is also about ensuring economic security," he said.

Other findings:

•Health care spending outpaced the 2.6% growth in the overall economy, accounting for 16.2% of the gross domestic product compared with 15.9% in 2007. It was 13.6% in 2000.

•Medicare spending grew 8.6%, an increase over the 7.1% growth posted in 2007. The report blames the increase partly on expanded enrollment in Medicare Advantage. Those Medicare plans, which are run by private insurance companies, are slated for cuts in the health care bills.

The current recession, which officially began in December 2007, may have had more of an impact on health care spending than past economic downturns in part because of the credit freeze, said Paul Ginsburg, an economist with the Center for Studying Health System Change.

"These days a lot of people with private health insurance have significant out-of-pocket costs," he said. "People didn't have access to a credit card or a loan if they had to pay a $2,000 deductible."

http://www.usatoday.com/news/health/201 ... osts_N.htm