Consumer health costs set to surge
WASHINGTON -- Prepare to dedicate more of your budget to healthcare: The nation is expected to be spending $1 of every $5 on it by the end of the decade.
That means a rise in out-of-pocket expenses, such as the copays 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 healthcare 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 today.
Currently, the number is closer to $1 out of every $6, or $2 trillion.
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," said John Poisal, deputy director of the government's National Health Statistics Group.
Health and Human Services Secretary Mike Leavitt has spent recent weeks traveling the country, urging consumers and care givers 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 healthcare 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 healthcare 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.
The economists also predict government programs will gradually replace employers when it comes to providing health insurance for millions of Americans.
