Rehab

Healthcare spending growth rate declined in 2004

Rehab Regs, January 20, 2006

The growth in healthcare spending in the U.S. slowed for the second straight year in 2004, according to a report released last week by the Centers for Medicare & Medicaid Services (CMS). Spending in 2004 rose 7.9%, slower than the 8.2% growth in 2003 and 9.1% growth in 2002.

CMS' Office of the Actuary published the annual report in the journal Health Affairs. It shows that healthcare spending was $1.9 trillion in 2004, or $6,280 per person.

The share of the nation's Gross Domestic Product spent on healthcare grew 0.1% to 16.0% in 2004, which was also a smaller increase than experienced in recent years.

Hospital spending accounted for 28% of the growth in personal healthcare spending between 1997 and 2000 and increased to 38% by 2002 to 2004.

Out-of-pocket payments grew 5.5% in 2004, slower than aggregate health spending growth and slower than private insurance premiums.

Spending for home health agencies rose more rapidly than any other service category, increasing 13.3% in 2004.

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