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Health Care Expenditure Growth Rate Is Decelerating

Rate declined from 6.7 percent in 2006 to 6.1 percent in 2007, yet outpaced slowing economy

TUESDAY, Jan. 6 (HealthDay News) -- In 2007, the U.S. health care spending growth rate decelerated to its lowest level since 1998, primarily because of decreased drug spending, according to an article published in the January/February issue of Health Affairs.

Micah Hartman, of the Centers for Medicare and Medicaid Services in Baltimore, and colleagues developed estimates from sources such as Medicare and Medicaid program data, the Census Bureau's quinquennial Economic Census and Service Annual Survey, provider-based surveys, and private health insurance filings with state insurance commissioners.

Between 2006 and 2007, the researchers found that the national health expenditure growth rate declined by 0.6 percent, from 6.7 percent to 6.1 percent. They attributed more than half of the slowdown to a decline in the retail prescription drug spending growth rate, which at 4.9 percent was the slowest growth rate since 1963. The authors cited several factors for the decline, including increased use of generic drugs, slower growth in the price of prescription drugs and increased consumer safety concerns.

"Overall nominal economic growth decelerated from 6.1 percent in 2006 to 4.8 percent in 2007," Hartman and colleagues conclude. "The most recent economic data indicate that the economy is growing at a slower rate through the third quarter of 2008 and likely into 2009. Recent history has shown that through the downturns, health spending has remained somewhat insulated from the effects of a slowing economy and has increased as a share of gross domestic product. With the uncertain economic climate and recent shifting of payment responsibilities in the health care system, the interaction between the economy and the share of it devoted to health spending will continue to be closely watched."

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