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U.S. Health Costs Keep Rising As Share Of GDP, Blues Find

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The U.S. spent nearly $2.3 trillion on healthcare in 2007, or 16.2% of its gross domestic product, according to projections by the Blue Cross and Blue Shield Association. That’s up from $2.1 trillion, or 16% of the GDP, in 2006.

BCBSA, Chicago, predicts national healthcare expenditures will increase by more than 70% between 2007 and 2015, to almost 20% of the GDP.

Based on data reported by the federal government and private sources, the Blues also note the following cost trends:

o Since 2002, the number of uninsured has increased among all income levels, averaging 15.8% of Americans in 2006, up from 15.3% in 2005. And more than 50% of uninsured Americans do not qualify for public health care programs and cannot afford coverage.

o Consumers are spending more on healthcare as a percentage of their total expenditures, and healthcare spending is increasing across all income levels in both absolute and percentage terms. For instance, the Centers for Medicare and Medicaid Services estimates 2007 health care spending per capita reached $7,498, vs. $7,092 a year earlier. Health expenditures in 2006 were growing at a rate of 6.9%, compared to 3.4% for consumer prices and 6.5% for wages and salaries.

o The leading causes of death are also the most costly. In 2004, over 147 million people had one of the 5 most expensive conditions, costing more than $311 billion. (Those conditions were heart disease, cancer, trauma-related ailments, mental disorders and pulmonary conditions.)

o There are as many as 75,000 preventable deaths each year, totaling as much as $3.7 billion in avoidable hospital costs, the National Committee for Quality Assurance estimates.

The Blues did find reason for optimism about health costs in the growth of consumer involvement in cost controls in a number of areas.

For instance, enrollment in consumer directed health plans rose 129% from 2005 to 2007. The Blues noted, too, that consumers with either health savings accounts or health reimbursement accounts were far likelier than other individuals to track health care expenditures.

Even those without CDHPs increasingly are likely to research health information. Citing data from Pew Research Center, Washington, BCBS notes that 64% of all consumers have used the Internet to research specific diseases or conditions, while 51% have gone online to investigate certain medical treatments or procedures, and 49% have used it to research nutritional information.

BCBSA also reported anti-fraud efforts by its associated companies in 2006 resulted in overall savings and recoveries of more than $187 million. Of that, $128 million was recovered from payments based on fraudulent claims. More than $58 million was saved by identifying and denying fraudulent claims prior to payment.

The data is included in BCBSA’s “2008 Medical Cost Reference Guide.”


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