US Health Care Spending Tops $2 Trillion

January 14, 2008

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The Centers for Medicare and Medicaid Services (CMS) has revealed that Americans spent $2.1 trillion on health care in 2006, a 6.7-percent increase over the previous year. The findings were published in the January/February edition of Health Affairs.

Prescription drug spending rose at a faster rate—an 8.5-percent increase—totaling $216.7 billion in 2006. Analysts noted that drug costs remained steady, but that public programs such as Medicare’s Part D drug coverage plan made it possible for patients to purchase more prescriptions. Drug costs would have been higher if not for the increased use of generic drugs: 63 percent of prescriptions were filled by generics in 2006, compared to 56 percent in 2005.

Meanwhile, spending on physician services (including Medicare reimbursement) grew at a slower rate than average in 2006. It rose by 5.9 percent to $447.6 billion, the lowest rate of increase in seven years.

A full summary of the 2006 health care spending report, as well as commentary on the impact of the report, can be found on the Kaiser Network news site.

For more information on the Academy's efforts to improve physician reimbursement, contact Amy Kaloides at akaloides@aan.com.