Study finds spending on health comes to $7,681 per person

WASHINGTON — The recession dramatically slowed U.S. health care spending to $2.3 trillion in 2008, but it still grew much faster than the economy as a whole, accounting for more than 16 percent of the nation's economic output, says a new federal analysis.

The figure of $2.3 trillion — that's $7,681 per person — underscores the challenges confronting President Barack Obama and lawmakers seeking to overhaul the system. Obama has repeatedly cited spiraling health costs as one of the main reasons Congress needs to pass his health plan, and administration officials said the findings highlighted the need for quick action.

"This report contains some welcome news and yet another warning sign," said Jonathan Blum, a top official at the government's Centers for Medicare and Medicaid Services. "Health care spending as a percentage of GDP (gross domestic product) is rising at an unsustainable rate. It is clear that we need health insurance reform now."

However, health care experts question whether there are significant cost-containment measures in the legislation passed by House and Senate Democrats before Christmas — and Republicans insist there aren't. The new report could provide fodder for both sides as lawmakers work to reconcile the House and Senate legislation into a final bill in coming weeks.

The new analysis by economists at the Centers for Medicare and Medicaid appears today in the journal Health Affairs. It found that total national health spending grew 4.4 percent in 2008, the slowest rate of increase since the centers began tracking health spending in 1960.

By contrast, the growth rate in 2007 was 6 percent. The study seeks to measure all public and private health expenditures.

Still, the growth of health costs was higher than the overall growth in gross domestic product, which stood at 2.6 percent in 2008 before adjusting for inflation.

Health spending reached 16.2 percent of the gross domestic product in 2008, up from 15.9 percent in 2007. That added up to $2.3 trillion and far higher per-person expenditures than other industrialized countries, although the higher spending is generally not matched by better health outcomes, studies have found.

Fast facts

Bypassing the GOP

House and Senate Democrats intend to bypass traditional procedures when they negotiate a final compromise on health care legislation, officials said Monday, a move that will exclude Republican lawmakers and reduce their ability to delay or force politically troubling votes in both houses. The unofficial timetable calls for final passage of the measure to remake the nation's health care system by the time President Barack Obama delivers his State of the Union address, probably in early February. Only one Republican, Rep. Anh "Joseph" Cao of Louisiana, voted for the legislation.

Study finds spending on health comes to $7,681 per person 01/04/10 [Last modified: Monday, January 4, 2010 11:07pm]

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