According to a study published in the today’s issue of the journal Health Affairs, national health spending grew in 2007 at the lowest rate in nine years, mainly because prescription drug spending increased at the slowest pace since 1963.
The study belongs to researchers at the Centers for Medicare and Medicaid Services. Overall, health spending represented 16.2 percent of U.S. gross domestic product, up slightly from 16 percent in 2006, the researchers noted.
The nation’s health-care tab grew 6.1 percent to $2.2 trillion, or $7,421 a person. That’s down slightly from the 6.7 percent growth in 2006, according to CMS annual summary of healthcare expenses.
“Slower spending growth for prescription drugs was one of the major factors driving down overall healthcare spending growth in 2007,” said Micah B. Hartman, a statistician at CMS who worked on the study.
The report found that prescription drug prices rose 1.4 percent in 2007, much less than 3.5 percent growth recorded in 2006. Prescription drug spending increased 4.9 percent in 2007, reaching $227.5 billion. The rate of growth was the lowest since 1963. In 2006, prescription drug spending rose 8.6 percent.
Hartman added that in 2007, 67 percent of prescriptions were filled with generic drugs, up from 63 percent in 2006 and 60 percent in 2005. Moreover, in 2006, the Food and Drug Administration approved lower-cost generic versions of the allergy medicines Flonase, the cholesterol Pravachol and Zocor, the antidepressant Zoloft and several other widely used brand-name products.
Another factor contributing to the slowing health care spending was the number of black-box warnings (indication that the drug carries a significant risk of serious or even life-threatening effects) the FDA added to some drugs: 68 in 2007, compared with 58 in 2006 and 21 in 2003. These warnings might have discouraged people from using the drugs, Hartman said.
Spending on most healthcare services, including hospital stays and physician visits held steady or grew slightly in 2007. To be more specific, spending on hospital care rose 7.3 percent in 2007, to $696.5 billion compared with an increase of 6.9 percent in 2006. Also, spending for doctors’ services rose 5.9 percent in 2007, to $393.8 billion, which is less than the 6.4 percent increase in 2006, mainly because Congress reduced Medicare payments to doctors for imaging services.
CMS Acting Administrator Kerry Weems said the report is another reminder that the costs of health care continues to be a real and pressing concern for both Americans and the federal government. The report “is a stark reminder that we must redouble our ongoing efforts to reform the delivery of health care services in this country to bring about the goal of affordable, high quality health for all Americans,” Weems said.
Next month, the CMS will release another report projecting health spending from 2008 to 2018.
