For everyone who’s been going on about our (adopt Dr Evil voice) 2 Trillion Dollar health care industry, it’s now official. The 2006 data is out and we’re at 16% of GDP, $2.1 trillion and $7,000 and change per head. Growth, somewhere at the bottom of the trough, is around 6.5%. That’s nominal not real of course, but it’s still way over the economy’s growth rate, and that gap will grow if/when a recession hits.
The major change of course was the introduction in 2006 of Medicare Part D which mean that drug spending increased at over 8.5%. But then again, they’re telling us that Part D was less than originally projected. Although I bet you no one in CMS (or now out of it) will tell you what really was originally projected, and in fact which of the many revised projections the $41 Billion costs of Part D was really below!
And of course assuming that cost increases were stable in 2007, we’re actually already at 2.1 trillion + 6%, or 22.35 trillion!
Bloomberg reported back in October that a congressional study found private insurers offering Medicare-funded prescription drug plans cost U.S. taxpayers almost $15 billion a year in excess administrative fees and pharmaceutical costs. The study also found insurers failed to pass on $1 billion a year in discounts from drugmakers to participants in Medicare. According to the chairman of the House Oversight and Government Reform Committee, the use of private insurers to deliver Medicare drug coverage is driving up costs and producing only limited savings on drug prices.
But the Medicare drug benefit plan was part of a much broader message. With oncology drugs accounting for about 69% of total Part B spending on prescription drugs and related services, the Medicare D plan made it more important for Senior cancer patients. A study published in the journal Health Affairs, discovered that Part D expanded access to cancer therapies. Apparently Medicare has gone far in accomplishing the task of making many cancer drugs available to our Seniors. Nearly all generic cancer drugs and 70% of brand-name cancer drugs are covered by the Part D plans.
Now, only if Medicare would be allowed price negotiations, eliminate the doughnut hole, and stop subsidizing private insurance Medicare plans!
In this blog explained that in 2006 data is out and we’re at 16% of GDP, $2.1 trillion and $7,000 and change per head. Growth, somewhere at the bottom of the trough, is around 6.5%.