Health Affairs
Web Exclusive
February 7, 2003
Health Spending Projections For 2002-2012
By Stephen Heffler, Sheila Smith, Sean Keehan, M. Kent Clemens, Greg Won, and Mark Zezza (from the Office of the Actuary, Centers for Medicare and Medicaid Services)
Projection for 2003:
National Health Expenditures (NHE) (billions):
$1660.5
NHE, per capita:
$5775
NHE, as percent of GDP:
15.2%
Both the recently released historical health spending estimates and this set of projections have highlighted the enormous pressures mounting on our health care system. Private health insurance premiums are rising at rapid rates, federal and state budget shortfalls exist, a softer labor market has reduced the number of people with private insurance and has increased Medicaid enrollment, and provider costs are continuing to rise. These trends have the unique, although not unparalleled, impact of affecting all of the relevant parties-from payers to providers to employers to consumers-at the same time.
Experience indicates that changes in the mechanisms of payment and delivery of care, as well as consumers’ preferences and public sentiment, will result in a slowdown in growth, temporarily alleviating some of these pressures. However, experience also indicates that society is likely to be willing to allocate more of each dollar of income to health care. We project both of these outcomes over the next decade: national health spending growth slowing from 8.7 percent in 2001 to 6.7 percent in 2012, and the share of GDP accounted for by health care increasing from 14.1 percent in 2001 to 17.7 percent in 2012. The intriguing part of the next decade may be where it leaves us, since the baby-boom generation will begin to become eligible for Medicare at the end of the projection period, and an unparalleled set of pressures on the system is likely to develop.
http://www.healthaffairs.org/WebExclusives/Heffler_Web_Excl_020703.htm