A new government report predicts that a slowdown in Medicare and private-sector expenditures will curb the growth in U.S. healthcare spending, but hospitals will continue to be the principal cost driver in the near future.
Even with the slowing, the nation's healthcare bill will reach $3.1 trillion in 2012, up from $1.4 trillion in 2001, according to a study by the Centers for Medicare and Medicaid Services. The report was published on the Health Affairs Web site, healthaffairs.org.
After an 8. 7% growth in health expenditures during 2001, the increase is projected to steadily decline to 8.6% in 2002 and 7.3% this year. Hospital spending again will be the main culprit in the growth, at least in the near term, although that, too, is slowing. Hospital costs accounted for 27.1% of the total increase in 2002 spending, down from 30% in 2001.
In 2001, hospital expenditures totaled $451.2 billion, up 8.4% from the year before. For 2002, hospital services spending is projected at $484.6 billion, a 7.4% increase. This year, Americans will spend $511.2 billion, a 5.5% jump.
"They're saying the rate of growth is slowing, and that's good news," said Don May, vice president of policy for the American Hospital Association.
The authors attribute the slowdown to the expiration of several federal provisions that will decrease provider reimbursements. May said, however, that the CMS overestimated the impact on those provisions initially, so projected slowing of hospital expenditures may be optimistic and utilization of services may turn out to be greater than predicted.
According to the report, Medicaid spending will have increased 11.7% to 146.1 million at the federal level and 12.6% to 106.7 million at the state level for 2002. This year, federal spending on the program for low-income Americans is projected to spike 9.6% while state spending is expected to rise 9.5%.
Decreases in Medicare spending growth will offset the Medicaid increases, however. Medicare spending is expected to rise 5.2% in 2002 and 3% this year.