Private and public health spending is expected to grow by an average of 7.3% from 2002 to 2012, then slow to 6.7% a year, according to a new CMS report in today's issue of Health Affairs.
In comparison, CMS says healthcare spending grew by 8.7% to $1.4 trillion in 2001. But the rate is expected to decline slightly to 8.6% in 2002 and 7.3% in 2003, due to slower Medicare and private health insurance growth, the agency says.
CMS adds that anticipated growth in Medicaid and increases in hospital spending accounted for 27.1% of health spending growth in 2002 and would continue to drive overall spending growth over the next decade.
By 2012, health costs would account for 18% of GDP, compared with a 14.1% share of the GDP in 2001, CMS says.
"Private health insurance premiums have been rising at rapid rates, budget shortfalls exist at both state and federal levels, a softer labor market has reduced the number of people with private insurance and increased Medicaid costs and provider costs are continuing to rise," writes Stephen Heffler, deputy director of the CMS National Health Statistics Group.