News

US health spending surges to 17% of GDP

BMJ 2010; 340 doi: http://dx.doi.org/10.1136/bmj.c772 (Published 08 February 2010) Cite this as: BMJ 2010;340:c772
  1. Bob Roehr
  1. 1Washington, DC

    Spending on health care in the United States rose to $2.5 trillion (£1.6 trillion; €1.8 trillion) in 2009, experts at the government’s Center for Medicare and Medicaid Services have estimated.

    That is a rise of 5.7% over the amount spent in 2008. Spending on health care in the US now constitutes 17.3% of the gross domestic product (GDP), up from 16.2% in 2008.

    It is the largest percentage increase in health spending in the five decades that records have been kept. The analysis attributes much of the increase to the economic recession that struck the US in 2009, resulting in contraction of the economy and therefore of GDP, but some was due to an actual rise in spending.

    The rate of increase in health spending should ease as the economy recovers. “For the next several years growth [in health spending as a percentage of GDP] will be relatively flat as the economy recovers,” said Christopher Truffer, an analyst at the centre and lead author of the report, which appeared in Health Affairs (doi:10.1377/hlthaff.2009.1074).

    Spending on physician and clinical services was the biggest factor in the annual increase (this spending rose by 6.3% in 2009, compared with a 5% increase in 2008), due in part to care associated with the H1N1 flu epidemic. Hospitalisation was the next leading factor (5.9% in 2009; 4.5% in 2008).

    While prescription drug costs showed the greatest change from the previous year (5.2% in 2009; 2% in 2008), the 2009 rate of increase was less than that for the other major factors.

    Consumers’ out of pocket expenses in 2009 increased at a slower rate than in the previous year (2.1% in 2009; 2.8% in 2008) to $283.5bn. Some of that could be attributed to continuing enrolment in the Medicare Part D prescription drug programme for elderly people (BMJ 2010;340:c81, doi:10.1136/bmj.c81), but economic uncertainty also led some people to defer or not purchase recommended medical services and drugs.

    The analysis projects that health spending will continue to outpace the rest of the economy for the next decade. It is predicted to constitute 19.3% of GDP by 2019. The report does not foresee any of the proposed health reform plans as having an important effect in reining in this growth.

    One trend is for public spending to grow faster than private spending. Health spending by the private sector is at a historically low level, said Dr Truffer. This is because of the poor economy, with people losing their jobs and therefore their associated employment based health insurance, and applying instead for public health insurance programmes and direct services.

    He does not expect that economic recovery will bring a return of private spending to recent levels. Over the longer term, he said, retiring “baby boomers” will swell the ranks of those eligible for Medicare, the health programme for elderly people. Public spending should grow to more than half of all health spending by 2012.

    Notes

    Cite this as: BMJ 2010;340:c772