Growth in U.S. health spending remains historically low in 2010

U.S. healthcare spending experienced historically low rates of growth in 2009 and 2010, according to the annual report of national health expenditures published in the January issue of Health Affairs. 

U.S. healthcare spending grew only 3.9 percent in 2010, reaching $2.6 trillion or $8,402 per person, just 0.1 percentage point faster than in 2009. The low rate of growth, the data show, reflects lower utilization in healthcare than in previous years.

According to CMS, the health spending share of the overall U.S. economy remained unchanged at 17.9 percent despite a rebounding gross domestic product. The health spending share has typically increased, rising over time from 5.2 percent in 1960.

“We have worked hard since the passage of the Affordable Care Act in 2010 to lower healthcare cost growth,” said Marilyn Tavenner, acting CMS administrator. “We believe that the tools in health reform will help keep healthcare cost growth low while improving the value of care for consumers.”

Key findings from the new report include:

●  The federal government financed 29 percent of the nation’s healthcare spending in 2010, an increase of six percentage points from its share in 2007 of 23 percent, and reached $742.7 billion. Part of that increase came from enhanced federal matching funds for state Medicaid programs under the American Recovery & Reinvestment Act, which expired in 2011. 

●  Medicare spending grew 5 percent in 2010, a deceleration from growth of 7 percent in 2009.

●  Medicaid spending increased 7.2 percent in 2010, slowing from 8.9 percent growth in 2009. 

●  The state and local government share of total health spending declined from 18 percent in 2007 to 16 percent in 2010 and totaled $421.1 billion, in part due to the temporary assistance in the Recovery Act.