| | U.S. Health Care Spending Reaches $2.1T in 2006, Increasing 6.7% | |
by Healthy News - 2/11/2008
U.S. health care spending in 2006 increased by 6.7% to $2.1 trillion, or $7,026 per capita, according to a CMS report published on Tuesday in the journal Health Affairs, the Washington Post reports (Lee, Washington Post, 1/8). According to the report, health care spending in 2006 accounted for 16% of gross domestic product, an increase of 0.1% from 2005 (Reichard, CQ HealthBeat, 1/8).
Prescription drug spending in 2006 increased to $216.7 billion, an 8.5% increase from 2005, the report found. Public programs -- such as Medicare, Medicaid, those operated by the Department of Defense and the Department of Veterans Affairs, and state and local hospital subsidies -- accounted for 34% of prescription drug spending, compared with 28% in 2005, before the Medicare prescription drug benefit took effect, the report found. The increase in prescription drug spending in large part resulted from the use of more medications, not higher prices, according to the report (Washington Post, 1/8).
Medicare beneficiaries who previously purchased medications out of pocket at list prices in 2006 began to receive coverage under the prescription drug benefit, and, as a result, they used more treatments, the report found (Alonso-Zaldivar, Los Angeles Times, 1/8). "Implementation of the Medicare drug benefit shifted the funding of retail drug purchases and impacted the rate of overall drug spending growth," Aaron Catlin, lead author of the report and an economist at HHS, said (Lopes, Washington Times, 1/8). Private Medicare prescription drug plans also received lower discounts on medications than state Medicaid programs, which previously provided coverage to dually eligible beneficiaries, the report found.
The report also cited the use of medications for new purposes and the increased use of biotechnology treatments (Pear, New York Times, 1/8). In addition, the report cited increased use of insomnia medications -- such as Ambien CR, manufactured by Sanofi-Aventis, and Lunesta, manufactured by Sepracor (Zhang, Wall Street Journal, 1/8).
The report found that prescription drug spending would have increased more without the use of more generic medications and the launch of programs that provide discounts on such treatments by Wal-Mart and other retail stores. Generic medications in 2006 accounted for 63% of prescriptions, compared with 56% in 2005, according to the report (New York Times, 1/8).
Provided by Healthy News on 2/11/2008
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