Federal nursing home spending gains speed while overall healthcare spending slows

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Guest Columns: Long-term care reform too expensive
Guest Columns: Long-term care reform too expensive
Federal spending on nursing home and home health accelerated in 2007, even as overall healthcare spending grew at the slowest rate since 1998, according to a new spending report issued today by the Centers for Medicare & Medicaid Services.

Freestanding nursing home spending expanded by 4.8% that year, compared with 4.0% in 2006. Meanwhile, spending for freestanding home healthcare services increased to 11.3%. Much of this growth was due to faster price growth in that industry, according to CMS. Overall healthcare spending climbed by 6.1% in 2007 to $2.2 trillion, or $7,421 per person. Total healthcare spending by public programs, such as Medicare and Medicaid, grew 6.4% in 2007, a deceleration from 8.2% 2006. 

One of the factors contributing to the overall slower growth in federal healthcare spending was a deceleration in prescription drug spending due to an increased use of generic medication. Retail prescription drug spending grew by 4.9% in 2007, compared with 8.6% growth in 2006, according to the report.
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