$2.5 trillion spent on healthcare in 2009

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Healthcare spending in 2009 grew four percent, the smallest rise in half a century according to a new CMS report on national health spending released Wednesday. The relatively small increase was due to a mix of the recession and high unemployment, which dried up outlays for most medical goods and services, because people were less willing to whip out their wallets and indulge in out-of-pocket purchases.

Even so, healthcare spending as a share of gross domestic product continued to rise. The $2.5 trillion spent on healthcare represented a whopping 18 percent in 2009, up one percentage point from 2008.

This can be explained, at least in part, by a smaller overall spending base due to the shrinking economy coupled with Medicaid spending. The latter grew 9 percent last year (compared with a 5 percent increase in 2008) as more people became eligible for and enrolled in Medicaid.

The recession did slow spending on private health insurance, which grew by just 1 percent in 2009, compared with 4 percent in 2008, due to a drop in enrollment.

Areas of healthcare spending that saw some of the biggest gains included home health services, retail prescription drug spending and hospital spending. Other key statistics from the report included:

  • Spending for home health care services provided by freestanding facilities grew 10 percent, to $68.3 billion, following growth of 8 percent in 2008.
  • Retail prescription drug spending grew 5.3 percent in 2009 to $250 billion, after 3 percent growth in 2008.
  • Hospital spending increased 5 percent to $759 billion in 2009 compared with 5 percent growth in 2008.
  • Physician and clinical services spending rose 4 percent in 2009 to $506 billion, a deceleration from 5 percent growth in 2008.

To learn more:
- read the press release on the report from CMS
- read the full National Health Expenditure Accounts report
- here's the Wall Street Journal article
- read the McClatchy article
- read the New York Times article
- here's Politico's article

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