US health­care tab hits $3.2tn; fastest growth in 8 years

Kuwait Times - - HEALTH & SCIENCE -

WASH­ING­TON: The na­tion’s health care tab grew at the fastest rate in eight years in 2015, driven by the cov­er­age ex­pan­sion in Pres­i­dent Barack Obama’s law and by costly pre­scrip­tion drugs, the gov­ern­ment said Fri­day. The growth of 5.8 per­cent in 2015 boosted to­tal health care spend­ing to $3.2 tril­lion. That’s an av­er­age of $9,990 per per­son, although the vast share of that money is spent car­ing for the sick­est pa­tients.

Health spend­ing grew about 2 per­cent­age points faster than the over­all econ­omy in 2015, said the re­port from non­par­ti­san eco­nomic ex­perts at the De­part­ment of Health and Hu­man Ser­vices. That’s a prob­lem be­cause it makes it harder for gov­ern­ment pro­grams, em­ploy­ers, and in­di­vid­u­als to af­ford the level of health care that Amer­i­cans are used to hav­ing.

The re­port was dis­ap­point­ing news for the out­go­ing Obama ad­min­is­tra­tion, which had en­joyed a long stretch of his­tor­i­cally low in­creases in health care spend­ing, and had sought to credit its 2010 health care over­haul for tam­ing costs. It’s a re­al­ity check for Pres­i­den­t­elect Don­ald Trump, who did not fo­cus much on health care dur­ing his cam­paign and im­plied that prob­lems could be eas­ily fixed.

Strug­gled for decades

Amer­ica has strug­gled for decades to bal­ance health care cost, ac­cess, and qual­ity. Obama’s law made sig­nif­i­cant strides to ex­pand ac­cess, and the re­port found nearly 91 per­cent of US res­i­dents now have cov­er­age. But the prob­lem of costs has re-emerged. That’s partly be­cause peo­ple with health in­surance use more med­i­cal care than the unin­sured, who tend to post­pone go­ing to the doc­tor. Some of the newly in­sured turned out to be sicker than those who were al­ready cov­ered.

The re­port “casts fur­ther doubt on the ex­tent of a per­ma­nent slow­down in health cost growth,” said econ­o­mist Eu­gene Steuerle of the non­par­ti­san Ur­ban In­sti­tute.

In a mile­stone for data-watch­ers, the re­port found that the fed­eral gov­ern­ment be­came the largest payer for health care in 2015. Wash­ing­ton ac­counted for 29 per­cent of over­all spend­ing. That was fol­lowed by house­holds (28 per­cent), busi­nesses (20 per­cent), and state and lo­cal gov­ern­ments (17 per­cent). In do­ing the anal­y­sis, the HHS ex­perts count the em­ployee share of pre­mi­ums for job-based in­surance as spend­ing by house­holds.

Spend­ing by pri­vate health in­surance plans in­creased by 7.2 per­cent in 2015, and Med­i­caid spend­ing grew by 9.7 per­cent. In both cases, the health care law was a driver. Nine mil­lion peo­ple had pri­vate in­surance through the health care law’s sub­si­dized mar­kets, and nearly 10 mil­lion had Med­i­caid cov­er­age as a re­sult of the law. In­creases in Med­i­caid spend­ing will be a prob­lem for states. Start­ing next year, states that ex­panded the pro­gram un­der the health law must grad­u­ally pick up a share of the costs.

Spend­ing on pre­scrip­tion drugs dis­pensed through phar­ma­cies in­creased by 9 per­cent in 2015. Although that rate of growth was less than in 2014, the re­port said drug spend­ing grew faster any other cat­e­gory, in­clud­ing hos­pi­tals and doc­tors. It wasn’t only pricey new drugs for hep­ati­tis C in­fec­tion driv­ing the trend, but also new cancer drugs and price in­creases for older brand-name and generic drugs.

Bright spot in the re­port

Medi­care was a bright spot in the re­port, grow­ing only by 4.5 per­cent, de­spite roughly 10,000 baby boomers a day reach­ing el­i­gi­bil­ity age. Cal­cu­lated on a per-ben­e­fi­ciary ba­sis, Medi­care spend­ing grew by just 1.7 per­cent.

For­mer White House of­fi­cial Ezekiel Emanuel said that’s partly due to the Obama ad­min­is­tra­tion’s stew­ard­ship. Not only did the health care law cut pay­ments to ser­vice providers, it set into mo­tion a se­ries of ini­tia­tives that aim to re­ward qual­ity, im­prove co­or­di­na­tion and pe­nal­ize poor per­for­mance.

— AP

Chart shows health spend­ing fig­ures; 2c x 4 inches; 96.3 mm x 101 mm.

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