What’s ahead? Private spending growth slows

MANAGED CARE April 2008. ©MediMedia USA

With the implementation of Medicare Part D squarely in the rear-view mirror, actuaries at the National Health Statistics Group at the Centers for Medicare & Medicaid Services are turning their attention to the coming demographic shift: Baby-boomers begin to sign up for Medicare.

The statisticians expect continued steady growth in national health spending, with some acceleration through 2009 because of greater use of resources. What will change, they say in the report, “Health Spending Projections Through 2017: The Baby-Boom Generation Is Coming to Medicare,” is that private spending growth will decelerate from 6.6 percent in 2009 to 5.9 percent by 2017. Public spending, however, will accelerate as the leading edge of the baby-boom generation becomes eligible for Medicare.

The primary drivers of personal health care spending growth will be medical prices and utilization — specifically, medical price growth for 2012-2017 will account for 3.8 percentage points of the 6.7 percent growth in personal health care spending, versus 3.2 percent of the 6.6 percent growth in 2007.

Factors accounting for growth in personal health care spending, selected years

Source: Centers for Medicare & Medicaid Services. Office of the Actuary