Behind the Health Spending Data

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Spending on health care in the United States grew in 2007 at the lowest rate in nine years, according to government analysts — a sliver of good news for those worried about the relentless rise in health care costs. But buried within the overall statistics was sobering evidence that health costs continue to be a pressing concern that can only be remedied through deep-seated reform in the delivery of health services.

The Centers for Medicare and Medicaid Services reported this week that total health care spending rose 6.1 percent in 2007, slightly less than the growth of 6.7 percent in 2006. Even so, it continued to expand faster than the overall economy, reaching a total of $2.2 trillion in 2007, or 16.2 percent of the gross domestic product, a record.

The chief reason for the overall slowdown was much slower growth in spending on prescription drugs. Retail spending on prescription drugs rose only 4.9 percent in 2007. That was the lowest rate in more than four decades, well below the 8.6 percent growth the previous year and the average of 9.4 percent a year from 2001 to 2006.

Government analysts attributed the deceleration to increased use of generic drugs as many brand-name blockbusters lost patent protection, as well as to slower growth in prescription drug prices and safety concerns that depressed sales of some drugs. The big uncertainty is whether the slowdown will continue or is a temporary phenomenon.

http://www.nytimes.com/2009/01/08/opinion/08thu3.html?th&emc=th

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