Health expenditures are still rising far faster than the rate of inflation, and that rate of increase is expected to remain steady for the next nine years, according to recent estimates by the federal government.
A report released Tuesday by the Centers for Medicare & Medicaid Service projected growth in healthcare spending in 2007 to be 6.7 percent in 2007, and it extrapolated data to be about that level through 2017.
Healthcare's bite of the gross domestic product is expected to rise to 16.3 percent in 2007, up from 16 percent in 2006.
The analysis, prepared by CMS's Office of the Actuary, provides more urgency to efforts to restrain the growth of healthcare spending. The difference between the rate of growth in healthcare spending and general inflation over the 10 years is expected to be greater than the average differential over the past three years, the report indicated.
Healthcare spending could approach $4.3 trillion in 2017, or nearly 20 percent of the nation's gross domestic product.
The report, which was published online, said that the annual growth in healthcare spending is expected to outstrip both the growth in the overall economy, estimated at 4.9 percent, and the rate of general inflation, estimated at 2.4 percent.
There's slightly better news on the federal spending front, where the growth of spending will decelerate slightly. Still, CMS estimated that the growth in federal spending wil grow 6.8 percent in 2008. By contrast, federal spending on healthcare rose 8.2 percent in 2006, largely as a result of the implementation of the Medicare Part D drug benefit.
"The cost of healthcare continues to be a real and pressing concern," said Kerry Weems, acting administrator of CMS. "This projection of healthcare spending reminds us that we need to accelerate our efforts to improve our healthcare delivery system to make sure that Medicare and Medicaid are sustainable."