National health care spending increased by just 4 percent in 2009, the smallest growth percentage in 50 years. And yet, the industry continued to hold its own in a challenged economy, comprising 17.6 percent of the year's total economic output – which, in fact, was a record share.
Not surprisingly, the recession had a huge effect on the health care sector. High unemployment rates meant that many people lost access to employer-sponsored care, and even those with coverage chose in many cases to defer medical care in order to minimize out-of-pocket costs. The number of doctors' visits and hospital admissions decreased, and in response, doctors trimmed their capital investments.
The one area that did experience substantial growth was the Medicaid program, which saw enrollment increase by 3.5 million people, totaling an annual spend of $373.9 billion. Much of this money came from the federal government, which increased spending by 22 percent, the highest jump since 1991. Meanwhile, state spending decreased by 9.8 percent, the largest drop in Medicaid's history.
Prescription drugs represented another growth area, due to rapidly rising prescription costs and increased prescription numbers. Costs represented nearly $250 million of a total $2.3 trillion dollar medical spending pie.
Government officials were quick to state that none of this data reflected current PPACA legislation, signed into law in March 2010. There is some debate as to how the new laws will affect health spending, with Republicans stating that they could lead to monstrous rises in health expenses and premiums. In contrast, Richard S. Foster, the chief Medicare actuary, estimates that we will see a national spending increase of merely nine-tenths of 1 percent over the course of ten years, due to reduced Medicare payments to health care providers.
SOURCE: Kaiser Health News
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