Home > Health care, Money changes everything > Recession slows health-care cost increase

Recession slows health-care cost increase

So there’s good news and bad news about U.S. health-care spending in a new report from the California Health Care Foundation.

First, the good news: health-care spending increased only 4% in 2009, continuing a slower-growth trend that dates back to 2003. The bad news: the slower growth is partly due to the Great Recession, and health care spending still increased to almost 18% of GDP, the highest of all developed nations.

The U.S. continues to spend much more per capita on health care than other countries while achieving mediocre health outcomes. In 2009, per-capita spending exceeded $8,000!

Some economists and Pain Caucus advocates say excess spending is driven by health insurance coverage, that Americans don’t have enough “skin in the game” to be more price-conscious and cost-conscious in their use of health care services. Not so, according to the report: household spending accounts for 28% of all health-care expenditures, more than any other category.

Insurance does pay a large share of the cost of hospital stays and doctor visits, it’s true. But out-of-pocket spending goes heavily towards paying for Rx drugs and medical products, nursing-home care, and dental care, the data shows.

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