Karen Ignagni, president and CEO of America's Health Insurance Plans (AHIP), says new federal analysis confirms that rising costs for medical services, not health plan administration, is a huge driver for the surge in national health spending.
The Centers for Medicare & Medicaid Services (CMS) released data this week showing health care's share of the economy grew 1.1 percentage points in 2009 - the largest one-year increase in GDP share since the federal government began keeping track in 1960.
Expenses for health care in the U.S. now accounts for 17.3 percent of GDP, and is expected to rise.
"Rising health care costs are crushing our economy and adding a burden on working families and employers across the country," Ignagni said in a statement. "The new CMS data confirm that rising health care costs are driven by increases in underlying medical costs, not health plan administrative costs."
AHIP has pleaded to members of Congress, urging attention be paid to the cost of health care services rising at alarming rates. At the same time, Ignagni points out in a December letter to Congressman Joseph Crowley, D-N.Y., plan administrative costs are rising at far lower rates than the cost of care.
"Without a national, long-term strategy to address the rapid growth in underlying medical costs, health care spending will continue to grow far faster than the economy as a whole, crowding out other important domestic priorities, such as education, energy, and deficit reduction," Ignagni said in her latest statement.
AHIP notes three key findings taken from the latest CMS data:
- Hospital spending growth is projected to have accelerated from 4.5 percent in 2008 to 5.9 percent in 2009, as spending reached $760.6 billion.
- Spending growth for physician and clinical services is expected to have accelerated to 6.3 percent in 2009, up from 5.0 percent in 2008, with expenditures having reached $527.6 billion.
- Prescription drug spending is expected to have grown 5.2 percent in 2009, an acceleration of 2.0 percentage points from 2008, and to have reached $246.3 billion.
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