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Monitoring health spending increases: incremental budget analyses reveal challenging tradeoffs.

Hartman M, Smith C, Heffler S, Freeland M - Health Care Financ Rev (2006)

Bottom Line: With each passing decade, health care has consumed a larger share of gross domestic product (GDP) and Federal budgets.The financing challenges are expected to become more acute for private payers as well as Federal, State, and local budgets.With the implementation of Part D in 2006, the U.S. Office of Management and Budget projects that Federal budget pressures will heighten, bringing increased attention to Medicare's long-term fiscal outlook.

View Article: PubMed Central - PubMed

Affiliation: Office of the Actuary, Centers for Medicare & Medicaid Services (CMS), Baltimore, MD 21244-1850, USA. Micah.Hartman@cms.hhs.gov

ABSTRACT
With each passing decade, health care has consumed a larger share of gross domestic product (GDP) and Federal budgets. By the 2000-2004 period, society was willing to devote over 20 percent of the cumulative increase in GDP and the cumulative increase in Federal outlays towards health care. The financing challenges are expected to become more acute for private payers as well as Federal, State, and local budgets. With the implementation of Part D in 2006, the U.S. Office of Management and Budget projects that Federal budget pressures will heighten, bringing increased attention to Medicare's long-term fiscal outlook.

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Medicare Expenditure Share of Total Federal Outlays: Federal Fiscal Years 1980-2011
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f2-hcfr-28-1-041: Medicare Expenditure Share of Total Federal Outlays: Federal Fiscal Years 1980-2011

Mentions: We can also use marginal analysis to monitor the impact of growing Medicare spending on the Federal budget over time. In the same way that the marginal share of the GDP devoted to health spikes when the economy contracts, Medicare's marginal share increases when Federal outlays grow more slowly. The fiscal year (FY) 1987 peak can be explained by this phenomenon (Figure 2). In 1987, annual Medicare spending grew 7.0 percent and total Federal outlay growth slowed significantly from 4.7 percent in FY 1986 to 1.3 percent in FY 1987, driven by pressure from the 1985 Balanced Budget and Emergency Deficit Control Act (Gramm-Rudman-Hollings) (U.S. Office of Management and Budget, 2006b). This act called for specific reductions in spending if the annual Federal budget was not in balance, but was found unconstitutional in 1987.


Monitoring health spending increases: incremental budget analyses reveal challenging tradeoffs.

Hartman M, Smith C, Heffler S, Freeland M - Health Care Financ Rev (2006)

Medicare Expenditure Share of Total Federal Outlays: Federal Fiscal Years 1980-2011
© Copyright Policy
Related In: Results  -  Collection

Show All Figures
getmorefigures.php?uid=PMC4194975&req=5

f2-hcfr-28-1-041: Medicare Expenditure Share of Total Federal Outlays: Federal Fiscal Years 1980-2011
Mentions: We can also use marginal analysis to monitor the impact of growing Medicare spending on the Federal budget over time. In the same way that the marginal share of the GDP devoted to health spikes when the economy contracts, Medicare's marginal share increases when Federal outlays grow more slowly. The fiscal year (FY) 1987 peak can be explained by this phenomenon (Figure 2). In 1987, annual Medicare spending grew 7.0 percent and total Federal outlay growth slowed significantly from 4.7 percent in FY 1986 to 1.3 percent in FY 1987, driven by pressure from the 1985 Balanced Budget and Emergency Deficit Control Act (Gramm-Rudman-Hollings) (U.S. Office of Management and Budget, 2006b). This act called for specific reductions in spending if the annual Federal budget was not in balance, but was found unconstitutional in 1987.

Bottom Line: With each passing decade, health care has consumed a larger share of gross domestic product (GDP) and Federal budgets.The financing challenges are expected to become more acute for private payers as well as Federal, State, and local budgets.With the implementation of Part D in 2006, the U.S. Office of Management and Budget projects that Federal budget pressures will heighten, bringing increased attention to Medicare's long-term fiscal outlook.

View Article: PubMed Central - PubMed

Affiliation: Office of the Actuary, Centers for Medicare & Medicaid Services (CMS), Baltimore, MD 21244-1850, USA. Micah.Hartman@cms.hhs.gov

ABSTRACT
With each passing decade, health care has consumed a larger share of gross domestic product (GDP) and Federal budgets. By the 2000-2004 period, society was willing to devote over 20 percent of the cumulative increase in GDP and the cumulative increase in Federal outlays towards health care. The financing challenges are expected to become more acute for private payers as well as Federal, State, and local budgets. With the implementation of Part D in 2006, the U.S. Office of Management and Budget projects that Federal budget pressures will heighten, bringing increased attention to Medicare's long-term fiscal outlook.

Show MeSH