CMS: Health spending 'rising at unsustainable rate

Thursday, January 7, 2010

BALTIMORE - CMS issued its annual report on national health spending last week. The good news: Spending in 2008 grew at the slowest rate since the agency began tracking it in 1960. The bad news: It still grew 4.4% to $2.3 trillion or $7,681 per person.

The growth rate in 2008 was down from 6% in 2007, as spending slowed for nearly all healthcare goods and services, particularly hospitals. Spending on durable medical equipment, however, grew 4.1% to $26.6 billion in 2008 - it grew 3.3% in 2007.

At 4.4%, health spending continued to outpace overall economic growth, which grew by 2.6% in 2008 as measured by the gross domestic product (GDP).

Spending as a share of GDP continued to climb, reaching 16.2% in 2008 compared to 15.9% in 2007.

CMS used the report as a rallying call for healthcare reform.

"This report contains some welcome news and yet another warning sign," stated Jonathan Blum, director of CMS's Center for Medicare Management, in a release. "Healthcare spending as a percentage of GDP is rising at an unsustainable rate. It is clear that we need health insurance reform now."

To read the complete report, visit: