From The New York Times --
WASHINGTON — National health spending soared above $2 trillion for the first time in 2006 and has nearly doubled in the last decade, amounting to an average of $7,000 a person, the government reported on Monday. With the advent of a prescription drug benefit in 2006, Medicare spending grew at its fastest pace since 1981, the report said. Private health insurance spending grew at the slowest rate since 1997, and spending on Medicaid, which covers low-income people, declined for the first time since creation of the program in 1965. Over all, the report said, health spending increased 6.7 percent in 2006, slightly faster than in 2005, and now accounts for 16 percent of the total output of good and services, a slightly larger share than in 2005. Introducing the Medicare drug benefit for older Americans and people with disabilities caused changes that rippled through the entire health care sector. Health spending by businesses grew 5.7 percent in 2006, to $496.8 billion, the slowest rate of increase since 1997.
Aaron C. Catlin, an economist at the Health and Human Services Department, said the “deceleration in employer payments for private health insurance” resulted, in part, from the fact that Medicare now subsidized drug costs for many retirees. Employers lobbied for such subsidies when Congress created the benefit. Retail spending on prescription drugs shot up 8.5 percent in 2006, to $216.7 billion, in part because more prescriptions were filled by Medicare beneficiaries, especially those lacking drug coverage in the past. The increase was much greater than the 5.8 percent increase in 2005, but well below the average increase of 13.4 percent a year from 1995 to 2004. Other factors that drove up drug spending included the use of existing drugs for new purposes and the increased use of high-cost biotechnology products, the report said. National health spending first exceeded $1 trillion in 1995. Since then, even when adjusted for inflation, health spending has grown at a rapid clip, increasing 64 percent in 11 years. The data, published in the journal Health Affairs, showed that spending on hospitals, doctors and nursing homes grew more slowly in 2006 than in 2005. But administrative costs increased more than twice as fast. read on...
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Comments: It wasn't that long ago that health care costs were around the 1 Trillion mark - in 1995. To double in 10 years means that, yes in fact, health care costs are ballooning out of control. This should be more of a reflection of the poor health that Americans are experiencing, and while that is true, it is not all that is going on. The advancement of equipment, drugs, and procedures that keep a patient alive longer has to be the brunt of the rise in costs. The unfortunate thing about our health care is that it is not health care at all, but sick care. If we can start with the upcoming generation and start teaching life's lessons at an early age, and instill the habits of healthy living in the early years, then we have a chance of reducing costs in the decades to come, on a per capita basis. In other words, assuming the population continues to grow at the current rate, costs will continue to rise, but can be reduced as a percentage of the total. Start with your own weight loss and diet plan and live healthy. Teach those in your family the importance of a healthy lifestyle for the survival of the generations to come.
The Health & Wellness Institute, DC PC
