Health-spending growth up slightly in '06: government
WASHINGTON (Reuters) - Annual growth in U.S. health-care spending increased slightly in 2006 and continued to outpace inflation and the nation's overall economic growth, government researchers said in a report released on Tuesday.
Total U.S. health-care spending hit $2.1 trillion in 2006, a 6.7 percent rise from 2005, analysts with the Centers for Medicare & Medicaid Services (CMS) said. That was up from a 6.5 percent increase in 2005 and amounted to $7,026 per person.
By comparison, the overall U.S. economy grew by 6.1 percent and inflation was recorded at 3.2 percent in 2006.
Major contributors to the increase included higher spending for medicines and the costs of administering a new "Part D" prescription drug benefit through the Medicare insurance program for the elderly and disabled, the researchers said.
Annual growth in prescription-drug spending increased for the first time in six years.
"Prescription drug spending growth accelerated in 2006 to 8.5 percent, partly as a result of Medicare Part D's impact," the researchers wrote in the journal Health Affairs.
"Most of the other major health care services and public payers experienced slower growth in 2006 than in prior years," they said.
Total prescription drug spending was roughly $217 billion in 2006.
About half of the cost increase was due to more use of prescription drugs, which the researchers attributed partly to Medicare's new coverage. Insomnia drugs experienced faster growth than any other class, the report said.
At the same time, 63 percent of all prescriptions dispensed were for cheaper generic drugs, compared with 56 percent in 2005.
The researchers said prescription drug prices rose about 3.5 percent in 2006, the same as the previous year.
Medicare's drug coverage cost $41 billion in 2006, fueling the program's fastest rate of growth in 25 years. Total Medicare spending was $401 billion in 2006, an 18.7 percent increase from 2005.
Other sectors outside pharmaceuticals saw a slowdown in annual spending growth.
Payouts for hospital services increased 7 percent to $648 billion, and nursing home spending increased 3.5 percent.
The share of the U.S. economy devoted to health care remained steady in 2006 at about 16 percent of gross domestic product, the same level as the previous two years.
(Reporting by Lisa Richwine; Editing by Gary Hill)
