Health spending to get bigger share of U.S. economy

* U.S. health spending seen outpacing general economy

* Healthcare to grow to 19.3 percent of economy in 2019

By Donna Smith

WASHINGTON, Feb 4 (BestGrowthStock) – U.S. health spending will
grow faster than the overall economy this decade and by 2019
nearly 20 cents of every dollar spent in the United States will
go for healthcare, U.S. government analysts said on Thursday.

Economists at the Centers for Medicare and Medicaid
Services, known as CMS, said in a new report that the national
healthcare spending will grow an average 6.1 percent a year
over the decade to $4.5 trillion in 2019, about 1.7 percent
faster than the overall economy. Healthcare will account for
19.3 percent of the economy in 2019, the report said.

Last year an estimated $2.5 trillion was spent on
healthcare in the United States, accounting for about 17.3
percent of the economy, the report said.

The United States spends more on healthcare than any other
country, even with about 46 million people lacking medical
coverage. An effort by President Barack Obama to expand health
coverage and rein in soaring costs stalled in the U.S. Congress
after Democrats lost their supermajority in the Senate
following a special election in Massachusetts last month.

Democrats are weighing their options on how to advance the
legislation in the face of solid Republican opposition.

The CMS report shows that medical spending and numbers of
uninsured will continue to grow in the absence of reform.

“This report basically says nothing much has changed in
that regard,” said CMS chief actuary Richard Foster.

“All that (rising medical costs and the uninsured) is still
there, all that argues that some form of healthcare reform is
still a good idea,” he added.

By 2019 the United States will spend about $13,387 per
person per year on healthcare. That is up from about $8,047 in
2009 and a projected $8,290 per person in 2010, the report
said.

The economic slump had a big impact on slowing the growth
of private health spending as laid-off workers lost
employer-sponsored coverage. At the same time, spending by the
Medicaid government health program for the poor has gone up.

Public payments will account for half of all U.S.
healthcare spending by 2012 and reach 52 percent by 2019 as
baby boomers increasingly sign up for the Medicare health
program for the elderly, the CMS economists said.

The report said spending on prescription drugs grew by an
estimated 5.2 percent in 2009 due mostly to higher prices for
brand name drugs. An improving economy will accelerate spending
growth for prescription drugs to 5.6 percent by 2011, they
said.

But growth in prescription drug spending will slow in 2012
and 2013 as patents expire on many top selling brand-name drugs
sold by big pharmaceutical makers such as Pfizer (PFE.N: ) and
Merck (MRK.N: ), the report said.

After that, growth in drug spending will begin to
accelerate again to 7.7 percent in 2019 because of rising drug
prices and new drug approvals as well as an increasing share of
more expensive specialty drugs, the report said.

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(Reporting by Donna Smith; editing by Anthony Boadle)

Health spending to get bigger share of U.S. economy