''Costs continue to grow faster than income, and there's no reason to believe this won't continue,'' said Paul Ginsburg, president of the Center for Studying Health System Change, a research organization.
Ginsburg said the government and private sector is not helpless when it comes to lowering health bills. Medicare and the private sector can put more emphasis on encouraging healthy lifestyles and reducing obesity rates, he said. They can also focus their payments so that there is not such a huge incentive for doctors to order extra tests, imaging scans and various other procedures.
The report by economists from the Centers for Medicare and Medicaid Services, published in the journal Health Affairs, showed that spending on:
—Home health care rose 9.9 percent in 2006. In each of the previous two years, home health spending increased 12.3 percent.
—Nursing home care rose 3.5 percent.
—Wheelchairs, walkers, artificial limbs and other such medical equipment rose 2.3 percent.
Spending on hospitals and physician services accounts for about half of each dollar spent on health care in the U.S. Spending for both slowed slightly in 2006. Spending rose 7 percent for hospital care — versus 7.3 percent the year before. Spending for physician services rose 5.9 percent — versus 7.4 percent the year before.
Ginsburg said he anticipates that spending on hospitals will accelerate in coming years as they add operating rooms and beds. Those additions are focused on specialties that generate the most profit, such as cardiac care.
Drug spending represented the most significant exception to the slowdown in medical bills. Another important exception was the cost of private health insurance, up 8.8 percent in 2006, more than double the increase that occurred the previous year.
Medicare economists said the increase occurred because millions of people left traditional Medicare to enroll in private plans subsidized by the government. Medicare's economists said they could not say whether such a transfer led to greater health spending overall in the U.S. But they did note that the government spends about $10,133 per enrollee in the private plans versus about $9,538 per enrollee in traditional Medicare.
Democratic lawmakers say lowering payments to the insurers would reduce Medicare expenses and lessen the need for increasing taxes or cutting benefits later on when millions of baby boomers enter the system. But Republican lawmakers said lowering payments to Medicare Advantage plans means that insurers would simply cut benefits for those 8 million enrollees in Medicare Advantage.