U.S. Health Care Spending Reaches $2.2 Trillion in 2007

A report released on January 6, 2009 by the US Department of Health & Human Services, Centers for Medicare & Medicaid Services, documents that healthcare spending in the US rose to almost 2.2 trillion dollars in the year 2007. Also on January 6, 2009 Reuters news released articles about the report explaining that this amount translated into $7,421 for every man, woman, and child in the US. The report notes that although the rate of increase has decreased in 2007, the increase still represents more than 6.1 percent from 2006.

This means that 16.2 percent of U.S. gross domestic product is spent on some form of medical care. Some of the other interesting facts of this study are that in 2007, 31 percent of healthcare dollars went to hospitals, 21 percent to physicians and clinics, 7 percent on administrative costs, 10 percent to drugs, 25 percent to "other" and 6 percent to nursing homes. Additionally this study showed that private insurance paid 35 percent of this; Medicare 19 percent; Medicaid and the State Children's Health Insurance Program 15 percent; 12 percent from other public funds; 7 percent from other private sources; and 12 percent was paid for out of pocket by patients.

As a point of comparison, according to the global healthcare research company, "Themedica" the total health care expenditures across the world were $4.5 trillion in 2007. Of that total the US alone accounted for just less than half at $ 2.2 trillion. Additionally, the US has one of the largest medical and healthcare industries in the world. The USA's medical industry totals more than 750,000 physicians and 5,200 hospitals. In fact health care is such a large business in the US that one in every 11 US residents is employed in health care.

In spite of these staggering costs, the January / February 2009 issue of the journal Health Affairs, which reported on the cost of health care also reported that more Americans are suffering from more chronic illnesses. In reporting on this information Reuters UK, January 6, 2009 noted, "More Americans are burdened by chronic illnesses such as diabetes and high blood pressure, often having more than three at a time, and this has helped fuel a big rise in out-of-pocket medical expenses."

Out of pocket expenses have risen dramatically over the years. According to Kathryn Anne Paez of the Center for Health Policy and Research at Social and Scientific Systems in Silver Spring, Md, and co-author of the study, "Our study found that the prevalence of self-reported chronic conditions is increasing among not only the old-old but also people in midlife and earlier old age. The greatest growth occurred in the number of people affected by multiple chronic diseases, a group with sizable out-of-pocket spending." A January 6, 2009 WebMD article on this same study noted, "The number of people with three or more chronic conditions rose by 2% for people 20-44,10% for people 45-64,18% for people 65-79, and 17% for people 80 and older."

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