A number of prominent media outlets ran articles on a report from the Centers for Medicare and Medicaid Services (CMS) published in the journal Health Affairs that details a slackening in the growth in U.S. healthcare spending. The New York Times (1/6, A17, Pear) characterizes the drop in growth as being led by the slowest prescription drug spending growth since 1963, noting that 2007 saw the "lowest rate in nine years" of growth in overall healthcare spending. However, non-prescription drug "types of health spending rose at a brisk pace, pushing the total to $2.2 trillion, or 16.2 percent of the gross domestic product, a record. Spending averaged $7,421 for each person. Total health spending rose 6.1 percent, compared with a 6.7 percent increase in 2006." The Times calls the report "the most current and comprehensive data on the nation's healthcare sector," and notes that the study's main author, CMS statistician Micah Hartman, attributed the stagnant prescription drug growth to increased use of generics, a concurrent slowdown in the growth of drug prices, and "safety concerns" about some drugs.
The AP (1/6, Freking) attributes the slowdown to consumers increasingly using "generic drugs instead of brand-names to fill their medicine cabinets," noting that use of generic drugs increased from 63 percent to 67 percent in 2007. The AP then attributes the increased generic use to incentives from insurers and retailers, while "several blockbuster brand-name drugs lost their patent exclusivity in 2006, generating competition." Moreover, the FDA "issued more of its most serious warnings than in previous years -- 68 in 2007 versus 58 the year before and 21 in 2003."
However, in its report, the Wall Street Journal (1/6, A4, Fuhrmans, Zhang) concedes that the slowed growth figures "hardly represent a reprieve from soaring medical costs. Healthcare spending again expanded faster than the overall economy, suggesting its share of GDP will climb as the economy remains mired in a protracted recession." The Journal notes that the increase in prescription drug spending rose 4.9 percent, "compared with an 8.6 percent increase the year before."
The Hill (1/6, Young) reports the CMS report paints "a clear picture of the underlying problem" Obama and lawmakers "must resolve" because "healthcare spending continues to escalate at a faster rate than the economy and than workers' wages."
The Los Angeles Times (1/6, Levey) reports, "Mark Merritt, head of the Pharmaceutical Care Management Association that represents drug plans, saw the slowing growth in spending as a hopeful sign that healthcare expenses could be reined in." Merritt said "that speeding up the approval of other generics offers even more opportunities for savings. 'This is just a hint of what the future may hold,' he said." The Medicare Part D prescription drug benefit program was also credited with restraining growth by reining in Medicare administrative expenditures. McClatchy (1/6), the Memphis Business Journal (1/6), and Forbes (1/6, Whelan) also cover the story.
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