US retail prescription drug spending grew 2.9% to $263 billion in 2011, compared with a rise of just 0.4% the year before, when the total had reached $255.7 billion, according to the latest government figures.
This increased growth was due mainly to price increases for brand-name and specialty drugs during 2011, says the analysis, which has been produced by the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) and is published in the January issue of the journal Health Affairs.
Total healthcare spending in the US grew 3.9% to reach $2.7 trillion in 2011, marking the third consecutive year of relatively slow growth. The rise in national health spending also closely tracked growth in US nominal Gross Domestic Product (GDP) in 2010 and 2011, and health expenditures as a share of GDP remained stable from 2009 to 2011, at 17.9%, says the report.
However, even as growth in spending at the national level remained stable, personal healthcare expenditures accelerated from 3.7% to 4.1% in 2011, partly because of faster growth in spending for prescription drugs and also for physician and clinical services, although this increase was partly offset by slower growth in spending for hospital services.
And from a payer perspective, spending for Medicare (the federal health insurance programme for people aged 65 and over and some disabled people), for private health insurance and for consumer out-of-pocket payments increased faster in 2011 than in 2010. However, spending for Medicaid (the federal/state health insurance programme for people on low incomes) grew more slowly during the year, it notes.
On the whole, the impact of provisions of President Barack Obama’s Affordable Care Act (ACA) on aggregate health spending growth in 2010 and 2011 was minimum, the actuaries find.
Apart from prescription drug spending, the other areas where growth in expenditures accelerated in 2011 were:
– physician and clinical services, up 4.3% compared to 3.1% in 2010, primarily because of increased growth in “non-price” factors, such as the use and complexity or intensity of services that more than offset slower growth in prices for these services;
– Medicare spending, up 6.2% compared to 3.4% in 2010, and mainly attributable to a one-time increase in spending for skilled nursing facilities and faster growth in spending for physician services under fee-for-service Medicare and for Medicare Advantage spending;
– private health insurance, which was up 3.8% from 3.4% growth the year before, mainly because private health insurance enrolment increased 0.5% in 2011 after having declined each year from 2008 to 2010; and
– out-of-pocket spending, up 2.8% compared to 2.1% the year before, partly as a result of higher cost-sharing and increased enrolment in consumer-directed health plans.
In contrast, hospital spending grew 4.3% in 2011, compared to a rise of 4.9% in 2010. This is attributable to slower levels of rise in the prices charged by hospitals and low growth in the use of hospital services and in Medicaid spending for hospital care, says the report.
Expenditures by the Medicaid programme also showed slower growth in 2011, up just 2.5% compared to 5.9% the previous year. This was mainly the result of continued financial pressure on state budgets because of the economy and a shift in the share of spending from the federal government to the states, following the expiry of enhanced federal aid to states in June 2011. Also, growth in enrolment in Medicaid slowed, from 4.9% in 2010 to 3.1% in 2011, it adds.
