The Drucker School Student Association Blog

As the battle to reform healthcare continues to wage on Capitol Hill, the nation’s spending on health continues to rise.

Recent government estimates show that in 2009 the health share of gross domestic product (GDP) is expected to have increased 1.1 percentage points to account for 17.3 percent, the largest single year increase since 1960!

Loosely translated, that 1.1 percentage point translates in to $2.47 trillion, up 5.7 percent from the $2.34 trillion spent on health in 2008. The estimates, prepared by actuaries at the Centers for Medicare and Medicaid Services, appear in the March issue of the journal Health Affairs.

Average public spending growth rates for hospital, physician and clinical services, and prescription drugs are expected to exceed private spending growth in the first four years of the projections. As a result, public spending is projected to account for more than half of all U.S. health care spending by 2012.

So whether citizens are for or against greater government involvement in health care under overhaul legislation, there’s no escaping the fact that Uncle Sam will be footing most of the nation’s health bills very soon.

A huge factor in the big jump in the share of GDP going to health spending–and the bigger role for the government–is the overall slowdown in the economy, changing demographics and baby boomers aging into Medicare, and Medicaid enrollment galloping along as unemployment rises.

If government estimates are right, the nation will be spending $4.48 trillion for health care in 2019–19.3 percent of the then economy’s GDP.