Healthcare costs continue to grow faster than overall economy, says CMS report

New National Health Expenditure Accounts data released by CMS show that health spending in the United States grew at 4.4 percent in 2008. Although the recession has brought a reduction in the rate of increase in health care costs, the data show costs continue to grow faster than the overall economy and the portion of GDP devoted to health care continues to increase.

"The latest national health expenditure data demonstrate why health care reform needs to include a long-term strategy to reduce the growth of health care costs. Health care spending continues to rise faster than the economy as a whole, further straining family budgets and crowding out other urgent domestic priorities, such as education, energy, and the environment," said Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP).

According to CMS, "Despite the slowdown, national health spending reached $2.3 trillion, or $7,681 per person, and the health care portion of gross domestic product (GDP) grew from 15.9 percent in 2007 to 16.2 percent in 2008. These developments reflect the general pattern that larger increases in the health spending share of GDP generally occur during or just after periods of economic recession."

This is consistent with national data and information received from health plans showing that health care costs are expected to increase even further in 2009 due to the underlying growth in the cost of health care services.

Moreover, surveys from the past month continue to show Americans are concerned about the impact reform will have on their health care costs.