Thursday, February 4, 2010

Soaring cost of healthcare sets a record - latimes.com

Soaring cost of healthcare sets a record - latimes.com

Reporting from Washington - In a stark reminder of growing costs, the government has released a new estimate that healthcare spending grew to a record 17.3% of the U.S. economy last year, marking the largest one-year jump in its share of the economy since the government started keeping such records half a century ago.

The almost $2.5 trillion spent in 2009 was $134 billion more than the previous year, when healthcare consumed 16.2% of the gross domestic product, according to an annual report by independent actuaries at the federal Centers for Medicare and Medicaid Services, or CMS, scheduled for release Thursday.

The nonpartisan accounting agency also projected that as early as next year, the country could mark another milestone as government picks up more than half of the nation's total healthcare tab for the first time.

The rise in current costs, driven in part by surging spending in Medicare and Medicaid, and the bleak projections for the future do not take into account changes that may come if Democrats revive their healthcare overhaul legislation.

The report appears likely to fuel further debate about the health bills now stalled in Congress.

In the absence of change, the report raises a grim prospect for the country -- a healthcare system consuming an ever greater and potentially unsustainable share of the economy even as private health coverage lags.

Last year, CMS estimated that government spending on healthcare would not overtake private spending until 2016, compared with 2011 or 2012 in the current report.

"The health system is hurting, and we are seeing that in these numbers," said Karen Davis, president of the Commonwealth Fund, a leading authority on healthcare policy. ...

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