Healthcare spending grew 6.1% in 2007, representing a slight decrease in spending growth from 6.7% in 2006 and the slowest rate of growth in nearly a decade. Overall, healthcare spending reached $2.2 trillion, or $7,421 per person, the CMS said in its annual report on healthcare spending trends. The CMS attributed slower growth in retail prescription drug spending and spending associated with administering Medicare health benefits, as the main reasons for the lowest rate in healthcare spending growth since 1998.
In light of the recent economic crisis, Caroline Steinberg, vice president for trends analysis with the American Hospital Association didnt think the 2007 data were a good indicator of future healthcare trends in 2008 and beyond. The report says that healthcare has been recession-proof because it continues to see growth, she said.
Health spending growth overall outpaced the economy, consuming a larger portion of the gross domestic product in 2007, reaching 16.2%, up from 16% in 2006.
Hospital spending in 2007 increased 7.3% to $696.5 billion, marking the third straight year of relatively stable spending growth in the sector, according to the report, published by Health Affairs. Strong growth in Medicaid spending for hospital care accounted for much of the increase in hospital spending. Hospital price growth in the meantime slowed to 3.5% in 2007 from 4.4% in 2006. (For a longer version of this story, please click here.) -- by Jennifer Lubell