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Health care spending growth in 2011 remained at 3.9%

by Nancy Ryerson, Staff Writer | January 08, 2013
Growth in U.S. health spending in 2011 was at 3.9 percent, the same as 2010 and 2009, according to a new analysis from the Office of the Actuary at the Center for Medicare and Medicaid Services, which is featured in this month's issue of the journal Health Affairs. That means growth rates from 2009-2011 have remained the slowest since those numbers were first recorded 52 years ago.

On the whole, spending growth kept pace with nominal GDP while the health spending share of GDP remained at 17.9 percent. At the same time, some areas of health care spending did accelerate as a result of the Affordable Care Act. For example, private health insurance experienced 3.8 percent growth in 2011 compared with 3.4 percent growth in 2010, due in part to the act's provision that allowed those under 26 years old to enroll in their parents' insurance plan.

Out of pocket spending also jumped, from 2.1 percent in 2010 to 2.8 percent growth in 2011 partially due to higher cost-sharing and increased enrollment in consumer-directed health plans. Spending for retail prescription drugs grew to 2.9 percent in 2011 from 0.4 percent in 2010 thanks to price increases in brand name and specialty drugs.

As for declines, the health care sector saw drops in hospital spending, from 4.9 to 4.3 percent, because of low growth in the use of hospital services, reduced spending from Medicaid for hospital care and slow growth in the prices hospitals charge for services. There was also a decline in spending in government public health activities, due in part to an increase in public health spending in 2010 for H1N1 virus vaccinations.

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