Healthcare spending growth projected to remain
steady through 2017
According to a report from the Centers for Medicare and Medicaid Services (CMS), growth in healthcare spending in the United States is projected to be 6.7% in 2007, with average annual growth expected to remain near that rate through 2017. This annual growth rate over the full projection period (2007 to 2017) is projected to be higher than annual growth in both the overall economy (4.9%) and general inflation (2.4%).
As a percentage of gross domestic product (GDP), healthcare spending is expected to increase from 16.0% in 2006 to 16.3% in 2007, and it is anticipated to reach just over $4.3 trillion by 2017 and comprise 19.5% of the GDP. Growth in healthcare spending also is expected to outpace the GDP by an annual average of 1.9 percentage points through 2017.
Medicare spending growth is projected to slow to 6.5% in 2007 after the 18.7% growth experienced in 2006 as a result of the implementation of the Medicare Part D medication benefit. Medicare growth is expected to reach 8.0% by 2017 as the baby boom generation begins to enroll in the program. Medicaid spending growth, which is projected to be 8.9% in 2007, is expected to grow 7.9% per year and to account for 16.8% of total healthcare spending by 2017.
Other projections from the report include that hospital spending growth is expected to accelerate to 7.5% in 2007 from 7.0% in 2006, partially as a result of higher Medicaid payment rates. Hospital spending growth is then anticipated to decrease slightly through 2017 because the growth in demand for hospital services is expected to slow.
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