Health care spending keeps climbing

SALT LAKE CITY — Health care reform efforts continue to move as slowly as cold tar, but health care spending across the United States raged on in 2009, and when all the data come in, it will likely have had the largest one-year increase in history.

Despite the general downward slide of the rest of the economy, the arc of health care spending grew by 5.7 percent the past year, according to a report released Thursday by the Centers for Medicare and Medicaid Services.

At this rate, by 2019 health care spending will amount to 19.3 percent of all economic spending nationwide, and its share of the pie increasing to a fifth of all economic activity, compared to one-sixth of all U.S. goods and services now.

It doesn't take a health insurance actuarial table to see that if a fifth of the economy is health care, there's a good chance a fifth of your family budget will be going for it as well. Annual premiums for a Utah household of five or six, are hitting $8,000 per year now just for insurance coverage, which doesn't include co-pays and covering your plan's annual deductible, which have doubled under many workplace-based plans the past two years.

"This is what we mean when we say the current system is broken and financially unsustainable," Rep. David Clark, R-Santa Clara, House speaker and co-chairman of the Legislature's special task force on health care system reform. "This gives a whole new meaning to 'too big to fail.' "

That doesn't mean it necessarily will fail, especially if states like Utah are allowed to move ahead with retooling their own system as they see fit, no matter what Congress decides to do, let the free market really compete for once, and give consumers options for coverage rather than just forcing them into enroll in whatever plan their employer is offering.

Even in Utah, where health care costs average a third lower than the national average and the care is generally better than most other regions of the country, the future here is no picnic if costs aren't somehow reined in, said John T. Nielsen, special health care adviser to Gov. Gary Herbert and former Gov. John Huntsman Jr.

"The whole problem with today's system is we really don't know what we're buying, how much a procedure costs or even if it's going to work," Nielsen said. "Utah's on the right track, and further down it than any other state or Congress is, getting closer to injecting some real consumerism into the marketplace."

On a national scale, the economy continues to slide — down overall by 1.1 percent in 2009 — while health care spending spiked, growing by 5.7 percent, according to the report.

Enrollment in Medicaid, the government underwritten and jointly operated insurance plan for the poor and disabled, is on a historic rise, with spending more than doubling in 2009 to 9.9 percent, up from 4.7 percent in 2008.

Co-pay bumps combined with significant hikes in annual deductibles factored heavily in the 3.3 percent increase in spending on private insurance premiums.

Health care spending in general by working Americans will end up 2.8 percent higher than last year, according to the report.

e-mail: jthalman@desnews.com