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Business

January 10, 2012

America hits the brakes on health care spending

WASHINGTON — Is health-care relief finally in sight?

Health spending stabilized as a share of the nation's economy in 2010 after two back-to-back years of historically low growth, the government reported Monday.

Experts debated whether it's a fleeting consequence of the sluggish economy, or a real sign that cost controls by private employers and government at all levels are starting to work.

The answers will be vital for Medicare's sustainability, as well as for workplace coverage.

U.S. health care spending grew by 3.9 percent in 2010, reaching $2.6 trillion, according to the report by the Health and Human Services department.

That's an average of $8,402 per person — far more than any other economically advanced country.

Still, the increases for 2010 and 2009 were the lowest measured in 51 years. And health care as a share of the economy leveled off at 17.9 percent, the first time in a decade there's been no growth.

The main reason for the slowdown was that Americans were more frugal in their use of health care, from postponing elective surgery to using generic drugs and thinking twice about that late-night visit to the emergency room.

"Although medical goods and services are generally viewed as necessities, the latest recession has had a dramatic effect on their utilization," said the report published in the journal Health Affairs. "Though the recession officially ended in 2009, its impact on the health care sector appears to have continued into 2010."

Independent economists issued conflicting assessments.

"I think it could signal slower growth in the future," said Ken Thorpe, professor of health policy at Emory University in Atlanta. "Any discussion about reducing the deficit is going to focus on how we reduce the growth in health-care costs. And employers are adopting more effective tools to keep putting downward pressure on health-care cost increases."

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