Amid $2.6 trillion in U.S. health-care costs, drug bill was $259 billion, report says

Number crunchers from the Centers for Medicare & Medicaid Services (CMS) say health care spending increases in 2009-2010 slowed down to almost nothing, using the term very loosely.

The report says U.S. health care spending grew only 3.9 percent in 2010, reaching $2.6 trillion or $8,402 per person, just 0.1 percentage point faster than in 2009. The two-year rate of growth was the lowest in the 51 years of such number crunching.

Aside from the big number and per-person average, the frequently cited worrisome number for macro-business types and health-care financial folks is the percentage of the gross domestic product that went into health care spending. This report says that in 2010, the health spending share of the overall economy was unchanged at 17.9 percent. In 1960, for comparison sake, it was only 5.2 percent.

The calculations were part of the annual report on national health expenditures (NHE) published in the January issue of Health Affairs. A link to a CMS web page with some of the data is here. Once on that page, please note that some files are PDF, some Excel, some Zip.

“We have worked hard since the passage of the Affordable Care Act in 2010 to lower health care cost growth,” said Marilyn Tavenner, acting CMS administrator, said in a statement. “We believe that the tools in health reform will help keep health care cost growth low while improving the value of care for consumers.”

The causes that slowed growth are several. With unemployment higher in recent years, some people have put off spending on all sorts of things, medical care included. Programs to curtail unnecessary spending have also had some effect.

The pharmaceutical slice of health care spending has been about 10 percent and it remains so, according to the report.

Whether it was with money from their own pockets, private insurance plans or tax-payer funded government insurance plans such as Medicare, Americans spent $259.1 billion on prescription drugs in retail outlets, according to the report.

Within that total, almost $48.8 billion came out of pockets, about $117 billion came via private insurance, about $59.5 billion from Medicare and $20.2 billion from Medicaid. (The federal government shares Medicaid spending with states and local governments and the feds paid about $13.6 billion of the $20.2 billion Medicaid drug bill in 2010.)

Tracking the overall drug bill through moments in history from the same chart:

Year  - Drug Spending

1960 - $2.7 billion

1970 - $5.5 billion

1980 - $12 billion

1990 - $40.3 billion

2000 - $120.9 billion

2005 - $204.8 billion

2010 - $259.1 billion