[Congressional Record Volume 161, Number 3 (Thursday, January 8, 2015)]
[Extensions of Remarks]
[Page E30]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  HEALTH SPENDING RISES ONLY MODESTLY

                                  _____
                                 

                        HON. BILL PASCRELL, JR.

                             of new jersey

                    in the house of representatives

                       Thursday, January 8, 2015

  Mr. PASCRELL. Mr. Speaker, I submit the following article.

                       [From the New York Times]

                            (By Robert Pear)

       Washington.--Spending on health care in the United States 
     grew in 2013 at the lowest rate since the federal government 
     began tracking it in 1960, the Obama administration said 
     Wednesday.
       It was the fifth straight year of exceptionally small 
     increases in the closely watched indicator. The data defied 
     critics who had said such slow growth would not continue for 
     long once the recession ended in mid-2009.
       Health spending totaled $2.9 trillion last year, up 3.6 
     percent from 2012, the administration said. The share of the 
     economy devoted to health care, which appeared to be growing 
     inexorably for decades, has been the same since 2009.
       ``The 3.6 percent increase in 2013 is the lowest increase 
     on record in the national health expenditures going back to 
     1960,'' said Micah B. Hartman, a statistician at the Centers 
     for Medicare and Medicaid Services and lead author of the 
     report, published in the journal Health Affairs. ``The next 
     lowest increase was 3.8 percent in 2009. These rates are 
     within the range of the recent low rates of growth in health 
     care spending, between 3.6 and 4.1 percent from 2009 to 
     2013.''
       Spending for health care in 2013 averaged $9,255 a person, 
     government economists and statisticians reported. Health 
     spending grew at about the same pace as the economy and 
     accounted for 17.4 percent of the gross domestic product, 
     which reflects the total output of goods and services.
       Among factors restraining the growth of health spending, 
     the administration pointed to new limits on Medicare payments 
     to hospitals and health maintenance organizations; automatic 
     across-the-board cuts in federal spending required by a 2011 
     law; and the proliferation of high-deductible health 
     insurance plans, which tend to discourage the use of care by 
     requiring consumers to pay more of the cost.
       Faster growth in Medicaid spending offset some of the slow-
     down in spending by Medicare and private insurance in 2013, 
     officials said. The 2013 figures did not show the effects of 
     major expansions in coverage that took effect this year.
       Moreover, the data did not answer a question hotly debated 
     by health policy experts and economists: whether the recent 
     slowdown in health spending was attributable to aftereffects 
     of the recession or to cost-control features of the 
     Affordable Care Act, signed by President Obama in 2010. The 
     civil servants who wrote the report said some provisions of 
     the law ``exerted downward pressure'' on health spending 
     while others ``exerted upward pressure.
       ``The key question is whether health spending growth will 
     accelerate once economic conditions improve significantly,'' 
     the report said. ``Historical evidence suggests that it 
     will.''
       Marilyn B. Tavenner, the administrator of the Centers for 
     Medicare and Medicaid Services, said the report was ``another 
     piece of evidence that our efforts to reform the health care 
     delivery system are working.''
       Retail sales of prescription drugs totaled $271 billion 
     last year, accounting for 9.3 percent of all health spending. 
     This proportion has not increased substantially in recent 
     years, but it results from two divergent trends: an increase 
     in the use of high-cost specialty drugs and greater use of 
     low-cost generic medicines.
       ``Higher prices for specialty drugs were due in part to 
     expensive new medicines--in particular, those used to treat 
     multiple sclerosis and cancer--as well as more rapid price 
     increases for existing specialty drugs,'' Mr. Hartman said. 
     ``Although specialty drugs accounted for less than 1 percent 
     of prescriptions dispensed, they represented almost 28 
     percent of total pharmacy-related prescription drug spending 
     in 2013.''
       At the same time, the report said, the share of 
     prescriptions filled with generic drugs climbed to 80 percent 
     in 2013, up from 73 percent in 2011.
       Under the Affordable Care Act, federal and state officials 
     review insurance rates to identify ``unreasonable increases 
     in premiums,'' and the government requires insurers to spend 
     at least 80 percent of premium revenue on medical care and 
     quality improvement activities. These provisions helped hold 
     down health spending, the report said.
       The government reported lower use of inpatient and 
     outpatient hospital services in 2013, coinciding with 
     requirements for patients to share more of the cost under 
     some types of insurance.
       For example, the report said, ``the average patient cost-
     sharing charge per day increased 19.5 percent in 2013, while 
     the average cost-sharing for an outpatient surgery episode 
     increased by 10 percent.''
       Over all, the report said, medical prices increased just 
     1.3 percent in 2013, slightly less than prices in the general 
     economy. Prices for doctors' services increased less than 
     one-tenth of 1 percent, the smallest change since 2002, and 
     prices for home health care services declined. While Medicare 
     spending for doctors' services increased 2.5 percent last 
     year, Medicaid payments to doctors increased 14.9 percent, 
     mainly because of a temporary increase in payment rates for 
     primary care doctors treating Medicaid beneficiaries.
       Medicare, for older Americans and people with disabilities, 
     and Medicaid, for low-income people, accounted for more than 
     one-third of all health spending.

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