Navigation Links
Medicare Drug Plan Fuels Health-Care Spending
Date:1/8/2008

But Medicaid spending slowed for first time since its inception in 1965,,

TUESDAY, Jan. 8 (HealthDay News) -- The new Medicare prescription drug plan was largely responsible for an 18.7 percent increase in Medicare spending in 2006, which was double the increase in spending from the year before, U.S. health officials report.

In 2006, Medicare spending reached $401.3 billion, an increase from $338 billion in 2005, officials from the National Health Statistics Group at the U.S. Centers for Medicare and Medicaid Services, Office of the Actuary, said.

"National growth of health-care spending in 2006 was slightly faster than in 2005, increasing 6.7 percent following growth of 6.5 percent," Cathy Cowan, an economist in the National Health Statistics Group at the U.S. Centers for Medicare and Medicaid Services, Office of the Actuary, said during a news conference Monday afternoon.

"Expenditures reached $2.1 trillion or $7,000 a person," Cowan added. That rate was up from the 6.5 percent rate in 2005. The 2005 rate was the slowest growth since 1999.

The report appears in the January/February issue of Health Affairs.

At the same time that the Medicare drug plan increased spending, spending by Medicaid dropped for the first time since 1965, to $310.6 billion in 2006 from $313.5 billion in 2005. This drop was mostly due to drug coverage for people who were eligible both for Medicare and Medicaid being transferred to Medicare, Cowen said.

Richard Foster, chief actuary at the National Health Statistics Group at the U.S. Centers for Medicare and Medicaid Services, said the cost of the Medicare drug program, which took effect in 2006, was less than originally projected.

"The actual cost of Part D in 2006 was significantly below the cost we estimated before the program was implemented, and it continues to be lower than later estimates based on the actual bids from the plans," Foster said during the news conference.

After slowing for six years, prescription drug spending increased to 8.5 percent in 2006, compared with 5.8 percent in 2005. "This increase is due to increased use, lower rebates, new indications for existing drugs, growth in several therapeutic classes and increased use of specialty drugs," Cowen said.

However, more use of generic drugs helped keep the growth in drug cost low, Cowen said. The 2006 growth rate was less than the average annual rate of 13.4 percent per year from 1995 to 2004, she said.

Other than Medicare and prescription drugs, there was a general slowdown in spending by hospitals, physicians and clinics. In addition, home health care, nursing home care and dental care all grew at slower rates in 2006 than in 2005, Cowen said.

The Medicare drug plan was also responsible for a decrease in the rate of out-of-pocket spending for health care, Cowen noted.

Dr. Sidney M. Wolfe, director of the Health Research Group of Public Citizen, said he thinks the significant increase in expenditures in the Medicare drug program was due to the law that prohibits the government from negotiating prices with the drug companies, as well as a great deal of waste in administering the program.

"If you have a segment of health care completely out of control as in prescription drug prices for Medicare -- it's a strong argument why there should have been price controls and negotiated prices," Wolfe said.

Wolfe said that both the U.S. Department of Defense and the U.S. Veterans Administration negotiated prices with drug companies. "The drug companies used their lobbyists to fight to the death against price controls because they knew they would make much less money if there were price controls," he said.

There are also massive administrative wastes in the Medicare program, Wolfe said. "They are somewhere between $350 and $400 billion a year thrown down the drain because of excessive administration," he said.

In another study in the same journal issue, researchers at the London School of Hygiene and Tropical Medicine found that the United States ranked last of 19 developed countries when it came to deaths from conditions that could have been prevented by timely and effective health care.

The study looked at deaths from treatable conditions before age 75 between 1997 and 1998 and between 2002 and 2003.

The researchers found a 16 percent drop in deaths in the 18 other countries, but only a 4 percent decline in the United States. While many factors may contribute to this finding, "comparatively poor performance of the U.S. health-care system" is a factor, the researchers said.

More information

For more on Medicare, visit the U.S. Centers for Medicare and Medicaid Services.



SOURCES: Jan. 7, 2008, teleconference with: Cathy Cowan, economist, Richard Foster, chief actuary, National Health Statistics Group, U.S. Centers for Medicare and Medicaid Services, Office of the Actuary, Baltimore; Sidney M. Wolfe M.D., director, Health Research Group of Public Citizen, Washington, D.C.; January/February 2008 Health Affairs


'/>"/>
Copyright©2008 ScoutNews,LLC.
All rights reserved  

Related medicine news :

1. Higher Medicare spending yields mixed bag for patients
2. Most Medicare Drug Plans Continue to Hike Costs into 2008 Two-to-Three Times Rate of Inflation
3. Uninsured Benefit Once They Are Covered by Medicare
4. Health improves for previously uninsured adults after receiving Medicare coverage
5. HealthSouth Issues Statement on Medicare Bill and 75% Rule
6. Study Indicates Strong Consumer Preference to Fix Medicare Part D and Medicaid Flaws Threatening Access to Prescription Drugs
7. Medicare Fraud Strike Force Cases Result in Long Prison Terms for Five Health Care Company Owners
8. One Thing Washington Can Agree On: Time for E-Prescribing in Medicare
9. Kidney Patient Organizations, Kidney Community Come Out in Support of Medicare Secondary Payer (MSP) Extension
10. Technology can Dramatically Reduce Billions of Dollars in Medicaid, Medicare Fraud
11. Congressman Tom Reynolds Awarded for Protecting Medicare Choices
Post Your Comments:
*Name:
*Comment:
*Email:
Related Image:
Medicare Drug Plan Fuels Health-Care Spending 
(Date:5/28/2016)... ... 2016 , ... After a year and a half of planning the Multiple Pathways of ... Multiple Pathways of Recovery Conference was held May 2 -4, 2016 at the Mystic ... came together to explore the many pathways individuals use to get into and sustain their ...
(Date:5/27/2016)... ... May 27, 2016 , ... Two director-level employees of Horizon Blue Cross Blue ... Industry (TWIN) 2016 honorees. The award recognizes businesswomen who excel in their fields ... Director of the MLTSS (Managed Long-Term Services and Supports) Program at Horizon NJ Health ...
(Date:5/27/2016)... ... , ... This campaign aims to provide a path to improved education and ... and change. , As nearly 795,000 Americans suffering from a new or recurrent stoke ... with an estimated 129,000 of these people dying from stroke, it’s become our nation’s ...
(Date:5/27/2016)... ... 27, 2016 , ... Aimed at nurses and employees in ... courtesy of leaders in the nursing and health care industry. It also provides ... and associations—namely Jones & Bartlett Learning. , Jones & Bartlett Learning is adding ...
(Date:5/26/2016)... ... ... Despite last week’s media reports hinting at a June rate hike after the ... for an interest rate increase, according to Rajeev Dhawan of the Economic Forecasting Center ... Market Committee (FOMC) dot charts are of interest to the press for their noise ...
Breaking Medicine News(10 mins):
(Date:5/27/2016)... PUNE, India , May 27, 2016 ... in the instances of hypertension is driving ambulatory blood ... muscles lose their elasticity and their ability to respond ... blood pressure. This condition can lead to various cardiovascular ... and peripheral vascular disease. These diseases are growing in ...
(Date:5/26/2016)... , May 26, 2016 According ... "Medical Waste Management Market - U.S. Industry Analysis, Size, Share, ... management market in the U.S. was valued at US$ 5.89 ... CAGR of 3.4% from 2015 to 2023 to reach US$ ... analysis of current and emerging needle free drug delivery devices ...
(Date:5/25/2016)... May 25,2016 FDA 510(k) ... Cellvizio platform for urological and surgical applications ... inventor of Cellvizio®, the multidisciplinary confocal laser endomicroscopy ... in the US with the 12 th ... Administration (FDA). This new FDA clearance covers Confocal ...
Breaking Medicine Technology: