Good news? Recession slowed health care spending

WASHINGTON – It sounds like good news: The recession slowed the growth of the nation's health care bill to the lowest levels ever measured.

But a government report Wednesday said medical costs still gobbled up a record share of the overall economy, meaning the slowdown did not change the nation's underlying problem with out-of-control health care spending.

Americans spent $2.5 trillion on health care in 2009, or $8,086 per person, said the new estimates by number crunchers at Medicare's Office of the Actuary.

The 4 percent increase from 2008 levels represented the slowest rate of growth in 50 years of measuring national health care spending. Much of that was the consequence of people losing jobs that came with health insurance.

Nevertheless, as the economy shrank during the 2007-2009 recession, the share of the total economic pie consumed by health care costs grew to 17.6 percent, or more than $1 out of every $6. That increase also set a record.

The figures do not reflect the impact of President Barack Obama's landmark health coverage expansion, which didn't pass until 2010. The same Medicare office has previously projected the overhaul will lead to a slight increase in total health care spending, even as it extends coverage to nearly all Americans.

The recession "profoundly influenced total health care spending in 2009," the new report said. "Many consumers decreased their use of health care goods and services partly because they had lost employer-based private health insurance coverage, and partly because their household income had declined."

Hospitals scaled back expansion plans, further damping the rate of cost growth. Read More...