Medicare Spending Increases [New Study]

Posted on January 10, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

A New CMS Report

Staff Writers 

The Centers for Medicare and Medicaid Services recently reported that expenditures increased at the fastest rate in 25 years, fueled by its new Part D drug benefit. 

The CMS study found that health spending totaled $2.1 trillion in 2006 – or 16 percent of gross domestic product – up 6.7 percent from 2005, which experienced a growth rate of 6.5 percent. The rise came despite a slower pace of growth in public spending on most major health services, such as physicians and hospitals (Parts A and B), and only a slightly faster rate in spending growth for private payers. 

Spending on prescription drugs rose 8.5 percent after six consecutive years of slow growth, while spending on Medicare’s managed care plans increased 48 percent in 2006, almost 2½ times the 2005 pace, reflecting a 25 percent increase in enrollments and increased payments to insurers. 

Any comments on this WSJ first-read?

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