Healthcare spending growth rate slowest in decades: CMS

Healthcare spending in the U.S. grew 4.4% in 2008 to $2.3 trillion, the slowest rate of growth in nearly 50 years, the CMS reported.

Spending growth was down from 6% in 2007, as spending slowed for nearly all goods and services, particularly for hospitals, according to the report, “Health spending at a historic low in 2008,” published in the journal Health Affairs.

Hospital spending in 2008 grew 4.5% to $718.4 billion compared with 5.9% in 2007, “the slowest rate of growth since 1998,” CMS statistician Micah Hartman, who co-authored the report, said at a briefing to discuss the findings. Nevertheless, 31% of the nation's healthcare dollar went to hospital care in 2008, making up the largest percentage of spending, while physician and clinical services accounted for 21%. Other spending—such as dental, home health and durable medical products—made up 25% of total spending .

The economic downturn significantly affected healthcare spending, resulting in more Americans going without care. The recession also made it more difficult for people to afford private insurance. Private insurance benefits and premiums in 2008 grew at their slowest rate since 1967, while public programs such as Medicare and Medicaid grew 6.5%, the same rate as in 2007. Retail prescription-drug spending slowed to 3.2% in 2008 from 4.5% in 2007, reflecting a decline of per-capita use of prescription medications.

Despite slower growth, however, healthcare spending continued to outpace overall economic growth, which was 2.6% in 2008 as measured by the gross domestic product.

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