National Health Spending Research Articles

Health Spending Projections Through 2018: Recession Effects Add Uncertainty To The Outlook

During the projection period (2008-2018), average annual growth in national health spending is projected to be 6.2 percent-2.1 percentage points faster than average annual growth in gross domestic product (GDP). The health share of GDP is anticipated to rise rapidly from 16.2 percent in 2007 to 17.6 percent in 2009, largely as a result of the recession, and then climb to 20.3 percent by 2018. Public payers are expected to become the largest source of funding for health care in 2016 and are projected to pay for more than half of all national health spending in 2018.

National Health Spending In 2007: Slower Drug Spending Contributes To Lowest Rate Of Overall Growth Since 1998

In 2007, U.S. health care spending growth slowed to its lowest rate since 1998, increasing 6.1 percent to $2.2 trillion, or $7,421 per person. The health care portion of gross domestic product reached 16.2 percent, up from 16.0 percent in 2006. Slower growth in 2007 was largely attributed to retail prescription drug spending and government administration. With the exception of prescription drugs, most other health care services grew at about the same rate as or faster than in 2006. Spending growth from private sources accelerated in 2007 as public spending slowed; however, public spending growth has continued to outpace private sources since 2002.

Europe and central Asia's great post-communist social health insurance experiment: Aggregate impacts on health sector outcomes

The post-Communist transition to social health insurance in many of the Central and Eastern European and Central Asian countries provides a unique opportunity to try to answer some of the unresolved issues in the debate over the relative merits of social health insurance and tax-financed health systems. This paper employs regression-based generalizations of the difference-in-differences method on panel data from 28 countries for the period 1990–2004. We find that, controlling for any concurrent provider payment reforms, adoption of social health insurance increased national health spending and hospital activity rates, but did not lead to better health outcomes.

Building Blocks For Reform: Achieving Universal Coverage With Private And Public Group Health Insurance

This paper presents a framework for universal health insurance that builds on the current U.S. mixed private-public system by expanding group coverage through private markets and publicly sponsored insurance. This Building Blocks approach includes a new national insurance "connector" that offers small businesses and individuals a structured choice of a Medicare-like public option and private plans. Other features include an individual mandate, required employer contributions, Medicaid/State Children's Health Insurance Program (SCHIP) expansion, and tax credits to assure affordability. The paper estimates coverage and costs, and assesses the approach. Our findings indicate that the framework could reach near-universal coverage with little net increase in national health spending.

Health Spending Projections Through 2017: The Baby-Boom Generation Is Coming To Medicare

The outlook for national health spending calls for continued steady growth. Spending growth is projected to be 6.7 percent in 2007, similar to its rate in 2006. Average annual growth over the projection period is expected to be 6.7 percent. Slower growth in private spending toward the end of the period is expected to be offset by stronger growth in public spending. The health share of gross domestic product (GDP) is expected to increase to 16.3 percent in 2007 and then rise throughout the projection period, reaching 19.5 percent of GDP by 2017.

Covering The Uninsured In 2008: Current Costs, Sources Of Payment, And Incremental Costs

People uninsured for any part of 2008 spend about $30 billion out of pocket and receive approximately $56 billion in uncompensated care while uninsured. Government programs finance about 75 percent of uncompensated care. If all uninsured people were fully covered, their medical spending would increase by $122.6 billion. The increase represents 5 percent of current national health spending and 0.8 percent of gross domestic product. However, it is neither the cost of a specific plan nor necessarily the same as the government's costs, which could be higher, depending on plans' financing structures and the extent of crowd-out.

Reducing Hospitalizations From Long-Term Care Settings

Hospital spending represents approximately one third of total national health spending, and the majority of hospital spending is by public payers. Elderly individuals with long-term care needs are at particular risk for hospitalization. While some hospitalizations are unavoidable, many are not, and there may be benefits to reducing hospitalizations in terms of health and cost. This article reviews the evidence from 55 peer-reviewed articles on interventions that potentially reduce hospitalizations from formal long-term care settings. The interventions showing the strongest potential are those that increase skilled staffing, especially through physician assistants and nurse practitioners; improve the hospital-to-home transition; substitute home health care for selected hospital admissions; and align reimbursement policies such that providers do not have a financial incentive to hospitalize. Much of the evidence is weak and could benefit from improved research design and methodology.

Mental Health Treatment Expenditure Trends, 1986–2003

This study determined spending on mental health treatment in the United States over time by provider and payer relative to all health spending. Estimates were developed to be consistent with the National Health Expenditure Accounts. Numerous public data sources were used. Mental health treatment expenditures grew from $33 billion in 1986 to $100 billion in 2003. In real 2003 dollars, spending per capita on mental health treatment rose from $205 to $345. The average annual nominal total mental health growth rate was 6.7%. In comparison, total health care expenditures increased by 8.0%. As a result of the slower growth rate of mental health expenditures compared with all health spending, mental health fell from 8% of all health expenditures in 1986 to 6% in 2003. Total national health spending increased by approximately $1.175 trillion from 1986 to 2003; of this, 6% is attributed to an increase in mental health spending. The mix of services has changed, with more care being provided through prescription drugs and in outpatient settings and less in inpatient settings. Payer mix has also shifted, with Medicaid taking a more prominent role. Spending on mental health treatment has increased over the past decade, reflecting increases in the number of individuals receiving mental health treatment, particularly prescription drugs and outpatient treatment. Changes in payer and provider mix raise new challenges for ensuring quality and access.

National Health Spending In 2005: The Slowdown Continues

In 2005, U.S. health care spending increased 6.9 percent to almost 2.0 trillion dollars, or 6,697 dollars per person. The health care portion of gross domestic product (GDP) was 16.0 percent, slightly higher than the 15.9 percent share in 2004. This third consecutive year of slower health spending growth was largely driven by prescription drug expenditures. Spending for hospital and physician and clinical services grew at similar rates as they did in 2004.

Health Spending Projections Through 2016: Modest Changes Obscure Part D's Impact

Growth in national health spending is projected to slow slightly from 6.9 percent in 2005 to 6.8 percent in 2006, marking the fourth consecutive year of a slowing trend. The health share of gross domestic product (GDP) is expected to hold steady in 2006 before resuming its historical upward trend, reaching 19.6 percent of GDP by 2016. Prescription drug spending growth is expected to accelerate to 6.5 percent in 2006. Medicare prescription drug coverage has dramatically changed the distribution of drug spending among payers, but the net effect on aggregate spending is anticipated to be small.

Is Medicaid Sustainable? Spending Projections For The Program's Second Forty Years

We constructed long-term projections of Medicaid spending and compared projected growth in spending with that of state and federal revenues. Notwithstanding the anticipated decline in employer-sponsored insurance and the long-term care needs of the baby boomers, we project that Medicaid spending as a share of national health spending will average 16.6 percent from 2006 to 2025--roughly unchanged from 16.5 percent in 2005--and then increase slowly to 19.0 percent by 2045. Growth in government revenues is projected to be large enough to sustain both Medicaid spending increases and substantial real growth in spending for other services.

Health Spending Projections Through 2015: Changes On The Horizon

Growth in national health spending is projected to slow in 2005 to 7.4 percent, from a peak of 9.1 percent in 2002. Private health insurance premiums are projected to slow to 6.6 percent in 2005, with a rebound expected in 2007. The introduction of Medicare Part D drug coverage in 2006 produces a dramatic shift in spending across payers but has little net effect on aggregate spending growth. Health spending is expected to consistently outpace gross domestic product (GDP) over the coming decade, accounting for 20 percent of GDP by 2015.

National Health Spending In 2004: Recent Slowdown Led By Prescription Drug Spending

U.S. health care spending rose 7.9 percent to $1.9 trillion in 2004, or $6,280 per person. Health spending accounted for 16 percent of gross domestic product (GDP), nearly the same as in 2003. The pace of health spending growth has slowed, compared with the 2000-2002 period, for both public and private payers. Hospital spending accounted for 30 percent of the aggregate increase between 2002 and 2004, and prescription drugs accounted for an 11 percent share-smaller than its share of the increase in recent years and much slower in absolute terms.

U.S. Hospitals: Examining Their Fraying Social Contract

U.S. Hospitals: Examining Their Fraying Social Contract

Is It Time For A Government-Run Health Care System?

Over the past forty years, national health policy has moved through successive eras that have differed markedly in reform initiatives. The 1960s and 1970s saw government policies that focused on hospital and physician supply and a regulatory national health planning system; the 1980s brought a national system of Medicare hospital and physician payment regulations; and the 1990s brought an emphasis on managed care and markets. Critical Condition, by Donald Barlett and James Steele, Pulitzer Prize–winning investigative reporters, makes a strong case that much is wrong with our health system, despite (and, in part, because of) “Washington’s blind obsession with market-based health care.” For the most part, their recounting of failures will be familiar to the health policy community: the world’s highest health care spending but often poor health outcomes (for example, in longevity and infant mortality); more than forty-four million uninsured people; loss of insurance coverage with job loss; communities having to organize bake sales to help pay a child’s medical bills; egregious hospital overcharging and bill collection practices; overpriced prescription drugs (protected by government import restrictions); large-scale fraud by drug companies; emergency department closings and ambulance diversions; drive-through deliveries; medical errors as a leading cause of death; the revolving door of Washington health policy influentials departing for lucrative lobbying jobs; and health-sector spending of $734 million in 1997–2000 to lobby Congress and the executive branch. From this general indictment, Barlett and Steele move on to deal with the role of Wall Street and investors (HealthSouth, HMOs, Columbia/HCA, Tenet, physician practice management companies), MedPartners’ failure, new business bureaucracies (with their voice mail and call centers—some outsourced to India), and the Madison Avenue influence (direct-to-consumer advertising, fen-phen, and other drugs). The authors are particularly good at combining descriptions of national problems with personal case studies that show how innocent people are victimized. However, their indictments of governmental pro-business policies could even be stronger. For example, they could have added a chapter on the 1997 Medicare+Choice initiative, which saw more than two million elderly people dumped by their Medicare HMOs, and another chapter on the unsuccessful fight to give patients a right to sue managed care companies. The recent Medicare prescription drug legislation will offer more opportunity for investigative journalists. Although Critical Condition works well to make the authors’ points, it is not a full assessment of the benefits and costs of health care markets. For example, the move to managed care and market-negotiated hospital and physician payments (from traditional open-ended B o o k R e v i e w s

It's The Premiums, Stupid: Projections Of The Uninsured Through 2013

Increases in the cost of health care from 1979 to 1999 accounted for the decline in health insurance coverage that occurred during that time period, as our earlier work demonstrated. Here we examine whether the model we presented adequately accounts for the observed changes in health insurance coverage from 1999 through 2002, and we show that the model accurately predicted the increase in uninsured people during that time period. Using the model and projections for national health spending, we project that the number of nonelderly uninsured Americans will grow from forty-five million in 2003 to fifty-six million by 2013.

U.S. Health Spending Projections For 2004–2014

National health spending growth is anticipated to remain stable at just over 7.0 percent through 2006, the result of diverging public- and private-sector spending trends. The faster public-sector spending growth is exemplified by the introduction of the new Medicare drug benefit in 2006. While this benefit is anticipated to have only a minor impact on overall health spending, it will result in a significant shift in funding from private payers and Medicaid to Medicare. By 2014, total health spending is projected to constitute 18.7 percent of gross domestic product, from 15.3 percent in 2003.

Health spending projections through 2013.

The rate of growth in national health expenditures is projected to fall to 7.8 percent in 2003 because of slower private and public spending growth. However, during the next ten years health spending growth is expected to outpace economic growth. As a result, the health share of gross domestic product (GDP) is projected to increase from 14.9 percent in 2002 to 18.4 percent in 2013. The recently passed Medicare drug benefit legislation (not included in these projections) is not anticipated to have a large impact on overall national health spending, but it can be expected to cause sizable shifts in payment sources.

Does the aging of the population really drive the demand for health care?

In the debate on health policy, it is widely believed that the aging of the U.S. population is a major driver of the annual growth in the demand for health care and in national health spending. This essay draws on the research literature and on data from the Medical Expenditure Panel Surveys (MEPS) to debunk that myth. Although in any year per capita health spending for people age sixty-five or older tends to average three to five times that for younger Americans, the aging of the population is too gradual a process to rank as a major cost driver in health care.

Health spending projections for 2002-2012.

We forecast a slowdown in national health spending growth in 2002 and 2003, reflecting slower projected Medicare and private personal health spending growth. These factors outweigh higher projected Medicaid spending growth, caused by weak labor markets, and an expectation of continued high private health insurance premium inflation related to the underwriting cycle. Over the entire projection period, national health spending growth is still expected to outpace economic growth. The result is that the health share of gross domestic product is projected to increase from 14.1 percent in 2001 to 17.7 percent in 2012.