Healthcare sees slowest growth in spending

Healthcare spending in the United States in 2011 grew at a modest rate for the third year in a row, marking the slowest prolonged growth rate in half a century, according to a report in this month's Health Affairs.

According to data compiled from the Office of the Actuary at the Centers for Medicare & Medicaid Services, healthcare spending grew at a rate 3.9 percent in 2011, identical to the 2010 and 2009 numbers. Healthcare spending as a share of gross domestic product remained at 17.9 percent.

CMS attributed the slow growth rate to the very moderate economic growth after the 2008 financial crisis, the Associated Press reported.

Hospital spending grew at a slightly faster rate than overall spending, at a 4.3 percent clip. However, it was slower than the 4.9 percent growth rate in 2010. And Medicaid spending slowed dramatically, to 2.5 percent in 2011 versus the 5.9 percent rate observed in 2010.

The slowdown stemmed in part from more cost-sharing among the states as a result of the expiration of the federal stimulus program, and an overall slowing of enrollment.

However, not all spending in the healthcare realm stayed flat. "We observed faster growth in spending among some payers and services in 2011," said Micah Hartman, a statistician in the Office of the Actuary at CMS and the lead author of the Health Affairs article.

For example, Medicare spending grew at a 6.2 percent rate in 2011, up from 4.3 percent in 2010. The authors attributed this to increased payments to nursing homes, and more spending on physician fee-for-service care under Medicare and Medicare Advantage, according to a Health Affairs blog post.

Healthcare industry spending is likely to continue nudging upward as the economy improves, AP noted.

For more information:
- here's the Health Affairs report and blog post
- read the Associated Press article