May 6—A recent slowdown in the healthcare spending on the elderly was driven by reduced spending on hospital and nursing home care, according to the federal healthcare accountant.

The latest report by the Office of Actuary for the Centers for Medicare & Medicaid Services on the slowdown in healthcare spending during the recent recession examined different age ranges. It found annual healthcare spending increases among people older than 64 averaged 4.1 percent from 2002 to 2010, but slowed to 2.3 percent from 2008 to 2010, much of the time period that comprised the recent recession.

The slowdown was “largely because” of reduced spending on hospitals, overall nursing care facilities, and continuing care retirement communities, according to the actuaries.

Spending on nursing care facilities and continuing care retirement communities increased at a “relatively slow” 3.3 percent average annual rate during 2008 to 2010, which was “mainly the result of states’ efforts through the Medicaid program to keep the elderly out of costly institutional care settings by using lower-cost home and personal care services,” according to the report.

The “modest” 3.7 percent growth in per person spending for hospital care for the elderly from 2002 to 2010 was primarily credited to slower growth in Medicare Advantage payments.

Healthcare spending increases among the elderly during these years were driven by a 7.6 percent annual increase in home and community-based health care.

In 2010, hospitals consumed 35 percent of healthcare spending for the elderly, 19 percent went to physician and clinical services, and 16 percent was for nursing care facilities and continuing care retirement communities, according to the report.

Among the signs of coming increases in elderly spending were findings that healthcare spending on the segment of the baby boom generation that is just short of Medicare age—people born from 1946 to 1964—increased 7.6 annually, on average, the fastest growth rate for any age group.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter @rdalyhealthcare.

Publication Date: Tuesday, May 06, 2014