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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (47126)	2/22/2006 2:02:24 PM
From: RealMuLan	Read Replies (2) \| Respond to of 116555

U.S. Health-Care Costs to Go Up -- Way Up 02.22.06, 12:00 AM ET WEDNESDAY, Feb. 22 (HealthDay News) -- Predictions that health-care costs in the United States will rise dramatically as the population continues to age appear to be coming true. According to federal forecasters, by 2015 one in every five U.S. dollars will be spent on health care, for total annual health-care spending of more than $4 trillion. The forecasters also predict that growth in health spending will surpass growth in the United States' gross domestic product (GDP) over the next decade. Health spending will make up 20 percent of GDP, vs. 16 percent today. "There is a continuous, steady climb from 2005," said John Poisal, deputy director of the National Health Statistics Group at the Centers for Medicare and Medicaid Services and co-author of the projections, which appear in the Feb. 22 online exclusive issue of Health Affairs. According to the forecasters, America's health-care future looks something like this: * Growth in national health spending is expected to decline to 7.3 percent in 2005, down from a high of 9.1 percent in 2002. Growth in national health spending will average 7.2 percent over the next 10 years, or 2.1 percentage points faster than GDP growth but slower than in the recent past. * Growth in private health insurance premiums are projected to slow to 6.6 percent in 2005, with the pace picking up again in 2007. * Hospital spending growth is projected to be 7.9 percent in 2005, and by 2015 is expected to reach $1.2 trillion, or double what it is today. Much of this is fueled by a boom in urban hospital building. * Similarly, spending on prescription drugs is expected to reach $446 billion in 2015, up from $188 billion in 2004. Over the decade, average annual spending growth for prescription drugs is projected to be 8.2 percent, two percentage points below last year's projection. Total prescription drug spending is expected to grow 7.7 percent in 2006. * Medicare spending will reach $792 billion in 2015, up from $309 billion in 2004. Growth will reach 25.2 percent in 2006, largely as a result of the implementation of the Medicare Part D drug benefit. Spending growth will slow to 5.4 percent in 2007, but will average 7.5 percent from 2008 to 2015. * Medicaid spending will reach $320 billion in 2006, up from $293 billion in 2004. Growth is expected to rise to 8.5 percent in 2007, and average 8.6 percent a year until 2015, at which point spending is anticipated to be $670 billion. * Growth in state, local and federal government spending on public health is estimated at 10.5 percent in 2005, more than double the rate of the year before, largely due to devastation wrought by hurricanes Katrina and Rita. Federal public health spending is forecast to increase 24.3 percent in 2005, more than four times the rate of 2004, for a total of $11.3 billion. * Growth in private health insurance premiums will continue to decline, down from 8.4 percent in 2004 to 6.8 percent in 2005. * Out-of-pocket spending growth will likely remain stable at 5.6 percent in 2005 while out-of-pocket payments are expected to decline 1 percent in 2006. All in all, consumers will spend $421 billion of their own money on health care by 2015, up from $248.8 billion in 2005. * Nursing home spending is expected to grow by 5.6 percent in 2005, up from 4.3 percent in 2004, largely the effect of an aging population. * Home health spending is projected to grow 13.2 percent in 2005, to reach nearly $49 billion. It represents the fastest-growing health-care sector. forbes.com