USA Health Care Costs reach 15.3% of GDP - the highest percentage ever

Topics: Health Care and Economics

re: Health Care Spending In The United States Slows For The First Time In Seven Years

The Centers for Medicare and Medicaid Services (part of the United States Department of Health and Human Services) issued a report (the press release states that report will appear in the Jan/Feb edition of Health Affairs but does not provide a link so the link is my guess of where the report will appear) and a news release putting a positive spin on the data.

"Spending growth for prescription drugs decelerated significantly to 10.7 percent, down from 14.9 percent in 2002." So we only increased spending on prescription drugs by 10.7 percent? I guess that could be seen as positive? To me though increasing expenditures by 10.2 percent seems more like of a problem than a success, though I can't argue it is less of a problem than the year before. My last post was on prescription drug prices in the USA.

“This is good news for the public and our health care system and is the result of changes designed to slow down the growth in spending,” said Health and Human Services Secretary Tommy G. Thompson. “But we have more to do before we can declare victory over rising health care costs.”

I would agree with the second sentence. Since health care costs once again rose much more quickly than the economy overall we certainly shouldn't declare victory over "rising health care costs." Stating it as though declaring victory were even close to an option seems like an odd choice.

And some fairly strait forward data: "Health expenditures in the United States grew 7.7 percent in 2003 to $1.7 trillion, down from a 9.3 percent growth rate in 2002. On a per capita basis, health spending increased by $353 to $5,670. Health spending accounted for 15.3 percent of Gross Domestic Product in 2003, outpacing growth in the overall economy by nearly 3 percentage points." As Dr. Deming noted decades ago, the United States economy was being severely hampered by excessive health care costs. Since then health care costs have taken an every increasing burden on the economy.

On a per capita basis $5,670, just on health care. 15.3% of GDP. Those are amazingly high figures. The median per capita GDP for a country (according to the CIA world fact book) is $5,600 (Cyprus). That is not the median income on earth, that would be lower. The fact book lists China with a per capita GDP of $5,000 and India with $2,900.