Decelerating price growth, investment losses, and lackluster Medicaid hospital spending slowed the growth rate of healthcare spending in the U.S. in 2008.
The U.S. Centers for Medicare and Medicaid Services (CMS) reported that spending for nearly all healthcare goods and services grew 4.4% in 2008, compared with growth of 6% in 2007.
CMS calculated total healthcare expenditures of $2.3 trillion in 2008, or $7,681 per person and 16.2% of the nation's gross domestic product (GDP). Despite slower growth in overall health expenditures, the share of GDP devoted to healthcare increased from 15.9% in 2007.
Hospital spending growth increased 4.5% to $718.4 billion in 2008, compared with 5.9% growth in 2007. The growth rate in 2008 was the slowest rate of increase since 1998. CMS cited decelerating price growth, investment losses, and slower growth in Medicaid hospital spending for the decline.
Partially offsetting these factors were increased growth in both inpatient and outpatient utilization and faster Medicare hospital spending growth.
Spending growth on durable medical equipment, which includes items such as eyeglasses and hearing aids, accelerated from 3.3% in 2007 to 4.1% in 2008, with expenditures reaching $26.6 billion in 2008.
Spending growth on physician and clinical services increased 5% in 2008 to $496.2 billion, compared with 5.8% in 2007.
Spending growth for other professional services, such as therapists, chiropractors, optometrists, and podiatrists, slowed to 5.6% in 2008, compared with growth of 6.5% in 2007. Expenditures totaled $65.7 billion in 2008.
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