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POLICY: It’s official–2 Trillion Dollars

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!

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RemiGregory D. Pawelski Recent comment authors
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Remi
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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%.

Gregory D. Pawelski
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Gregory D. Pawelski

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.… Read more »