The increase in health care spending in the US was the smallest since 1998 due to the growing use of generic drugs. Overall, healthcare spending in the US grew at 6,1 % in 2007, the slowest rate in nearly 10 years. But officials worry that devoting more resources to health care makes it harder for families to meet other priorities and for businesses to compete on the international market.

 

Among the factors that helped drive the trend, experts mention the fact that insurers are steering consumers to lower-priced medicines by charging low co-payments for certain drugs, while they charge higher co-payments for unsafe medicines. Large retailers are attracting consumers with special offers. Another factor may be competition between drug-companies, which is influenced by the fact that some brand-name drugs, including Zocor, Flonase and Ambien, lost their patent exclusivity in 2006.

 

According to federal data released Tuesday, the United States spent $2.2 trillion on health care in 2007. Spending on prescription drugs grew by 4.9%, the lowest growth rate since 1963, according to the annual report on health care expenses released by the Centers for Medicare and Medicaid Services. Government programs like Medicare and Medicaid, as well as private insurance companies prefer generic drugs, which are less expensive than branded drugs, explains Micah Hartman, a statistician with the National Health Statistics Group.

 

Health spending represented 16.2 percent of U.S. gross domestic product, up slightly from 16 percent in 2006, according to the report. The average U.S. household spent 6% more on health costs in 2007 than the year before.

Spending on most healthcare services, including hospital stays and physician visits held steady or grew slightly in 2007. Spending on hospital care rose 7.3 percent in 2007, to $696.5 billion compared with an increase of 6.9 percent in 2006. Federal spending on Medicare and Medicaid health insurance programs also continued to rise by more than 6%. Medicare spent $431.2 billion overall in 2007, up 7.2 percent, while spending for Medicaid grew 6 percent to $329.4 billion.

 

On the other hand, a report released last year by the US Center for Medicare and Medicaid Services estimated that total health care spending would double to more than $4 trillion a year by 2017. The costs have already reached more than $2.1 trillion in 2006, accounting for 16 percent of gross domestic product. Reports show the proportion of insurance premiums that workers pay for family coverage has remained constant over the years, but the dollar amount that workers contribute has increased. Employees continue to spend more in medical costs and their share of yearly insurance premiums. As they are paying more, more people have problems paying their medical bills.

 

The report comes as the new presidential team prepare plans to change the US health care system. Obama’s promises of change include expanding access to coverage and controlling costs.