Happy medical costs day!

Today the Centers for Medicare and Medicaid Services (oddly abbreviated CMS) released it's annual report on national medical expenditures. (Actually they released it yesterday but it was embargoed and I'm going legit here so I waited.) Some highlights:

• In 2009, [National Health Expenditures] NHE is projected to have reached $2.5 trillion and grown 5.7%, up from 4.4% in 2008 (the latest available historical year), while GDP, with the economy still in recession, is anticipated to have declined 1.1%.


• As a result of NHE growth outpacing GDP growth in 2009, the health share of GDP is expected to have increased from 16.2% of GDP in 2008 to 17.3% in 2009, which would represent the largest one-year increase in history.


• In 2010, NHE growth is expected to decelerate to 3.9% while GDP is anticipated to rebound to 4.0% growth. [Hah! -- C] Much of the projected slowdown in NHE growth is attributable to a deceleration in Medicare spending growth (1.5% in 2010, from 8.1% in 2009) that is driven by a 21.3% reduction in Medicare physician payment rates called for under current law’s Sustainable Growth Rate (SGR) provisions. [Which ain't gonna happen -- Congress will revise this. -- C]


• Private spending in 2010 is projected to grow just 2.8%, which is related to both declining private health insurance enrollment because of sustained high rates of unemployment and the expiration of Federal subsidies associated with COBRA coverage.


• Over the projection period (2009-2019), average annual health spending growth (6.1%) is anticipated to outpace average annual growth in the overall economy (4.4%). By 2019, national health spending is expected to reach $4.5 trillion and comprise 19.3% of GDP.

And yes, a higher percentage of that 19.3% of GDP will be public expenditures, as private health insurance becomes affordable and available to fewer and fewer people. Specifically, "As a result of more rapid growth in public spending, the public share of total health care spending is expected to rise from 47% in 2008, exceed 50% by 2012, and then reach 52% by 2019."

This is obviously completely unsustainable. It isn't going to happen, but it can not happen in a bad way, or it can not happen in a good way. The bad way is the way it's happening now -- more and more people being squeezed out entirely, and others being tossed onto state Medicaid plans that provide inferior care with major gaps in coverage, and which will just get worse and worse and more and more restrictive.

The good way is that we spend less money, but more wisely, cover everybody, and get better results, just like people in sensible countries. There are a few essays in today's NEJM which discuss how we can do this. I'll get to them, with my own two cents, anon.