Medicare Spending Rose 19% In 2006

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Main Category: Public Health
Also Included In: Medicare / Medicaid / SCHIP;  Health Insurance / Medical Insurance
Article Date: 08 Jan 2008 - 9:00 PDT

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Medicare spending rose faster in 2006 than it had done during the previous 25 years, due mainly to prescription drug benefit for disabled people and the elderly. In 2006, health care spending represented 16% of the American economy, a rise of 6.7% to $2.1 trillion, according to a report in Health Affairs. Healthcare spending continues to outpace economic growth.

The cost of medical services in America continues to increase at a faster rate than people's incomes.

Spending for Medicaid fell 0.9% in 2006 to $176 billion - mainly because over 6 million seniors were moved from Medicaid's drug plans to Medicare's program.

Total spending on drugs in the USA rose by 8.5% in 2006, compared to a rise of 5.8% in 2005. Total prescription drug spending was approximately $217 billion in 2006. The authors explained that prescription the drug spending growth in 2006 of 8.5% occurred mainly as a result of Medicare Part D's impact. However, 63% of all prescriptions dispensed in 2006 were for generic drugs, compared to 56% in 2005.

Nearly one third of all US health spending is taken up by hospital care (31%) - physician services take up 21%, and prescription drugs account for 10%, the report shows.

Below is a list of countries' healthcare spending, health services and life expectancies at birth
(Source - OECD)

-- United Kingdom
Spends 8.3% of its economy on healthcare
Universal healthcare coverage for all - Yes
Life expectancy - 79 years

-- France
Spends 11.1% of its economy on healthcare
Universal healthcare coverage for all - Yes
Life expectancy - 80.3 years

-- Germany
Spends 10.7% of its economy of healthcare
Universal healthcare coverage for all - Yes
Life expectancy - 79 years

-- USA
Spends 16% of its economy on healthcare
Universal healthcare coverage for all - No
Life expectancy - 77 years

"National Health Spending In 2006: A Year Of Change For Prescription Drugs"
Aaron Catlin, Cathy Cowan, Micah Hartman, Stephen Heffler the National Health Expenditure Accounts Team
Health Affairs, 27, no. 1 (2008): 14-29 doi: 10.1377/hlthaff.27.1.14
Click here to view Abstract online

Written by - Christian Nordqvist
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