Health Spending Could Double in a Decade: HHS Report

March 13, 2002 ( - With an estimated annual growth rate of 7.3% between now and 2011, Americans' health-care spending could double over that period compared with what they spent in 2000, according to a new government study.

Researchers from the Centers for Medicare and Medicaid Services at the US Department of Health and Human Services said total health care spending could reach $2.8 trillion or 17% of the Gross Domestic Product (GDP) by 2011, up from 13.2% of GDP in 2000.

Experts cite several reasons for the increase:

  • heightened bargaining power of hospitals and other health providers for higher insurance payments
  • aging baby boomers demanding expensive tests and treatment as well as prescription drugs advertised on television.

Private health-care spending is expected to peak this year at 9.4% then drop gradually to 5.9% by 2011, government researchers said. The trend reflects the reimposition of managed-care restrictions, a projected real-income slowing and other factors.

Spending on prescription drugs, the fastest growing part of health costs, is expected to slow, dropping from 17.3% growth in 2000 to 10.1% in 2011.

Rep. Ben Cardin, D-Maryland, a central figure in the ongoing Congressional debate over pension and benefit issues, said the estimates of rising costs are not surprising.

“I think the tech growth is wonderful – I think it’s great that we have all these options,” he said. “What we don’t have is a way to judge how much we can afford as a nation to spend on health care.”

Read more about the study :