AAMC Contact: Jane Eilbacher Health Care Affairs jeilbacher@aamc

1. National Health Expenditures 2009 AAMC Contact: Jane Eilbacher Health Care Affairs jeilbacher@aamc.org

2. National Health Spending, 2005-2009 Source: CMS, Office of the Actuary, National Health Statistics Group, Table 1, http://www.cms.gov/NationalHealthExpendData/downloads/tables.pdf National health spending grew 4.0% in 2009, to $2.5 trillion dollars, the slowest recorded rate of growth.

3. Health Spending and the GDP Source: CMS, Office of the Actuary, National Health Statistics Group, Table 1, http://www.cms.gov/NationalHealthExpendData/downloads/tables.pdf Health care spending rose 1 percentage point, to 17.6% of the GDP in 2009, the largest one-year increase in history. This is mainly attributable to a 1.7% decline in the GDP, the largest decline since 1938.

4. National Health Expenditures (NHE) by Source of Funds ($ billions) in 2009 Total NHE= $2.5 trillion 12% * 11% 6% 32% 20% 15% 4% Sources: CMS, Office of the Actuary, National Health Statistics Group, Table 3, http://www.cms.gov/NationalHealthExpendData/downloads/tables.pdf Martin, et al. Recession Contributes To Slowest Annual Rate Of Increase In Health Spending In Five Decades. Health Affairs, 30, no.1 (2011): 13 (For Other Third-Party Payers) * Includes health-related spending for worksite health care, other private revenues, Indian Health Service, workers’ compensation, general assistance, maternal and child health, vocational rehabilitation, other federal programs, Substance Abuse and Mental Health Services Administration, other state and local programs, and school health.

5. National Health Spending Average Annual Growth from Prior Year, by Payer Source: CMS, Office of the Actuary, National Health Statistics Group, Table 3, http://www.cms.gov/NationalHealthExpendData/downloads/tables.pdf Total Medicare spending grew at the same rate in 2009 as in 2008: 7.9%. Rising unemployment contributed to both a decrease in private health insurance spending, as well as an increase in federal Medicaid spending. The disparity in growth between federal and state Medicaid spending is largely due to an increase in the Federal Medicaid Assistance Program (FMAP) under the American Recovery and Reinvestment Act (ARRA).

6. Hospital and Physician Payments, as a share of NHE, 2009 Total NHE= $2.5 trillion 31% 20% 7% 5% 3% 5% 13% * 10% 6% Source: CMS, Office of the Actuary, National Health Statistics Group, Table 2, http://www.cms.gov/NationalHealthExpendData/downloads/tables.pdf Hospital care and physician services accounted for the largest portions of NHE, approximately 31% and 20% respectively. Retail sales of medical products, 13% of NHE, consisted largely of prescription drug sales, which individually represented 10% of NHE ($249.9 billion). *Includes government administration, net cost of health insurance, and government public health activities.

7. Hospital and Physician Services, 2005-2009 Expenditures ($ billions) % Growth from Prior Year Source: CMS, Office of the Actuary, National Health Statistics Group, Table 2, http://www.cms.gov/NationalHealthExpendData/downloads/tables.pdf Hospital care in 2009 grew at nearly the same rate as in 2008. In 2009, physician payments alone increased 3.3%, while clinical services grew 7.3%; in recent years, spending for clinical services has outpaced that for physician services.

8. Summary • Health care spending, including hospital and physician spending, has slowed, but still above inflation • Despite slower growth in health care spending, it is consuming an increasing share of GDP • Significant changes to care delivery and payment will be required to both slow payment growth and reset the spending curve