Healthcare spending slows, but outpaces the national economy

National health expenditures grew in 2008 at the slowest pace in nearly 50 years yet still outpaced economic growth at large, according to a new report from the California HealthCare Foundation.

Health Care Costs 101, an overview of the latest national healthcare spending trends, reveals that healthcare's share of the U.S. Gross Domestic Product rose to 16.2 percent, up from 15.9 percent in 2007. Total healthcare spending in 2008 reached $2.3 trillion, or $7,681 per person.

Health spending grew 4.4 percent from 2007 to 2008, the smallest annual increase on record. Prescription drug spending grew 3.2 percent, an all-time low, and the smallest increase of any major healthcare goods and services category.

Despite these findings, CHCF projections suggest that the recession-driven contraction in the economy, coupled with a modest increase in healthcare spending, will raise healthcare's share of the economy for 2009 to 17.3 percent, a record increase over 2008's 16.2 percent share.

Spending for healthcare is shared broadly throughout the economy, constituting some 6 percent of personal income, 8 percent of total compensation paid by private business, 36 percent of federal government revenues, and 24 percent of state and local government revenues.

Health Care Costs 101 is based on 2008 national data from the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Serves (CMS) Office of the Actuary.