Hospital spending growth slowed in 2006 to 7% or $648.2 billion, slightly less than the 7.3% increase registered in 2005, according to comprehensive healthcare spending data released by the CMS. Hospital price growth increased 4.4% in 2006 compared with 3.8% from the previous year, the data show.
Every year healthcare can do more things for more people, said Caroline Steinberg, vice president for health trends analysis at the American Hospital Association. Unfortunately, that leads to the cost of care in hospitals rising. The slower rate of growth in hospital spending, Steinberg said, could in part be attributable to a focus on treating more and more patients in the outpatient setting. There has been a big shift to outpatient care, she said.
Overall, spending for Medicares prescription drug program accounted for an 18.7% increase in Medicare spending in 2006, the fastest rate of growth in 25 years and double that of just a year before, according to the CMS report, which was published in the January-February 2008 issue of the journal Health Affairs. All told, Medicare spending rose to $401.3 billion in 2006, up from $338 billion in 2005. But in a historic turn, spending for Medicaid fell for the first time by 0.9%, after many of the dual eligible beneficiaries were shifted out of the federal-state program and into Medicare.
In 2006, overall healthcare spending rose 6.7% to $2.1 trillion, or $7,026 per person. Thats a slight increase from 2005 when spending growth was at 6.5%its slowest rate since 1999. -- by Matthew DoBias
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