The Remington Report

U.S. health spending grew 4.4% in 2008, its slowest rate in nearly 50 years, according to data released today by the Centers for Medicare & Medicaid Services. Spending for hospital care grew 4.5%, down from 5.9% in 2007 and the smallest increase since 1998.

Contributing to the slowdown were hospital reimbursement rates, which decreased from 3.5% growth in 2007 to 3.0% in 2008, and Medicaid spending for hospitals, which slowed as states with budgetary challenges implemented cost containment strategies, the report states. In addition, non-operating revenue for hospitals declined $6.9 billion, or 20.3%, in 2008 as hospitals reported major losses in investment income as a result of the recession, CMS said. Spending by public programs such as Medicare and Medicaid grew 6.5%, the same rate as in 2007, while private spending for health care grew 2.6%, down from 5.6% in 2007. The economic downturn significantly impacted health spending as more Americans could not afford to spend their limited resources on health care and instead went without care, CMS said.