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Recession continues to impact health care

This article was originally published in The Gray Sheet

Executive Summary

Medicaid expenditures grew at a faster pace than Medicare spending in 2009, at 9.9% and 8.1% respectively, according to CMS projections released Feb. 4. The jump in Medicaid spending was based largely on increased enrollment due to the recession, CMS said. Overall U.S. health care expenditures are expected to have grown 5.7% in 2009 to $2.5 trillion. The agency expects the recession contributed to lower demand for services with significant out-of-pocket expenses, and projects the growth in out-of-pocket spending slowed from 2.8% in 2008 to 2.1% in the U.S. in 2009. For the 10-year period from 2009-2019, CMS projects average annual spending growth overall will be 6.1% for hospitals and 5.9% for physician and clinical services. Last month, CMS reported that the growth of U.S. health care expenditures had slowed in 2008, the last full year for which data is available (1"The Gray Sheet" Jan. 11, 2010). CMS projects that by 2019, national health expenditures will reach $4.5 trillion, or 19.3% of the gross domestic product, with government health care spending growing at a faster rate than private spending

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