Health Care Costs To Keep Rising

(CBS/AP)  Health care is expected to account for $1 of every $5 spent in the United States in another decade.

That means a rise in out-of-pocket expenses, such as the co-pays for medicine, from about $850 this year to about $1,400 in 2016, a 5.3 percent annual increase.

The cost of health insurance is projected to rise even more quickly during that same time — 6.4 percent annually.

Over the coming decade, spending on health care will continue to outpace the overall economy. By the year 2016, it will total close to $4 trillion, economists at the Centers for Medicare and Medicaid Services said in a report being released Wednesday.

Today, the number is closer to $1 out of every $6, or $2 trillion.

"It's our expectation that by the year 2016, the end of our projection period, that health care costs, which currently consume about 16 percent of the total economy's expenditures, or GDP, by 2016 will consume about 20 percent of GDP," John Poisal, deputy director of the government's National Health Statistics Group, which did the study, told CBS Radio News.

Officials are worried by the news, reports CBS News national correspondent Byron Pitts.

"This report is cause for concern," says Herb Kuhn of the Centers for Medicare and Medicaid Services. "Health care costs are going up much faster than general inflation."

Consumers are spending more on the latest treatments, despite their rising costs. For example, federal officials cite a significant increase in the use of imaging to detect blockages or other diseases.

Income will also play a significant role in the greater health spending. Historically, when income rises 1 percent, health expenditures go up about 1.5 percent, officials said.

"What that indicates is a desire to purchase good health," Poisal said.

Health and Human Services Secretary Mike Leavitt has spent recent weeks traveling throughout the country, urging consumers and caregivers to give greater consideration to the price of various health procedures.

"People who have health insurance often don't care about price. People who don't have health care insurance can't find out the price even if they ask," he said in Detroit. "Medical pricing is a mystery to everybody."

The administration is pushing government agencies, insurers and health care providers to make information available that would help consumers become good shoppers. For example, Medicare lists the percentage of pneumonia patients at various hospitals who received a timely antibiotic, which is an indicator of the quality of care.

"We hope this information will help inform the discussions that go on at several different levels," Poisal said, "including those in Congress and other policy makers, other researchers and certainly the public needs to be informed of these things so that collectively we can make decisions about how to best proceed."

The economists said their study doesn't determine how much the rising costs will affect the average family in the U.S. There are too many factors involved, particularly when the federal government accounts for about half of overall health spending through programs such as Medicare, Medicaid and the Department of Veterans Affairs.

The economists also predict that government programs will gradually replace employers when it comes to providing health insurance for millions of Americans.

"We are moving incrementally away from traditional sources of insurance, such as employer-based coverage, to a system comprising more federal and state government-provided health care," said the economists, whose report will be published in the journal Health Affairs.

[drinuk]

cdegolier. You're either stupid or a mouthpiece for Big Pharma and the FDA. Chemo is only 5% effective.

[azman80]

Not to mention that I am not a medicine person. And the "few" times I have taken an over the counter medicine, I actually got sick or sicker from my sickness that I did have. I dont believe in a artificial immune system if I already have one in my body.

[azman80]

Maybe there needs to be more of "grandma's home remedies for the fixes we can do at home. People go to the doctor to get medicine for a cold, well what happened to taking care of yourself and eating the right foods that actually take care of your body. If most of us can try to abide by those simple measures, we could cut the cost of healthcare by at least 30 percent, which is a huge number in the unhealthy-care industry. Plus, we as americans eat a lot of *** thats making us sick and weak in the immune system.

[anopinion1]

Maybe if the fat retards in this country who live off of mcdonalds and cigarettes would care about their health, this wouldnt be a problem.

[mstiger71]

Well just another way for the Goverment to get our money. If the Goverment would just do what other Countries do. The USA might be better off with the money problem in health care.

[moxford0]

Almost 3 billion a week being flushed down Bush't toilet in Iraq and no universal health care. Talk about no support for the American public. Oh well, we better get them there before they get us here! I still wondering how they are going to get here. Perhaps by flying a camel over the Atlantic?

[hawksprings]

j-whit, what's your answer? Turn it over to the govnmt?

Then we'll have a health care deliver system with the efficiency of the Post office with the heart of the IRS and the cost overruns of the military.

There needs to be more competition among healthcare providers so people will shop. That will bring the price down, but at the same time, the gov needs to back off a little on the paperwork required. And if the patient has to pay the bill and be reimbursed by the insurance company instead of the insurance company directly paying the provider, you'll see things change.

[j-whitman]

Hawksprings,,, Free enterprise, like in the GOP's free trade ???? Only costs jobs, manufacturing, intelectual assets, family survivorability... I don't think the GOP's concept of Free Enterprise is good at all.

[j-whitman]

Cde,,, Privatization of our military hasn't helped our military,, It won't help our health care either, only makes it more expensive.

[hawksprings]

Using the free enterprise system to health care would bring the cost down.
- Require docs, clinics and hosptitals to post their prices.
- Forbid insurance companies from paying the providers, instead they must reimburse the patient directly.
- Figure out a way to get some of the government out of health care, docs and hospitals spend a lot of time of forms for the various gov agencies.

Those three things would drive prices down.