Health care spending slows in 2007 with generics

WASHINGTON — Spending on health care slowed slightly in 2007 as consumers turned more to generic drugs instead of brand-names to fill their medicine cabinets, the government reported Monday.

Although the cost of buying drugs, visiting the doctor or going to the hospital continued to increase faster than the overall economy, the 6.1 percent growth rate for all health care spending was the slowest since 1998. In 2006, spending increased 6.7 percent.

Officials worry that devoting more and more resources to health care makes it harder for families to meet other pressing priorities and for businesses to compete internationally.

Overall, Americans spent $2.2 trillion on health care, an average of $7,421 a person, for the year.

About 67 percent of medications dispensed in 2007 were generic drugs, up from 63 percent the year before. Generics can cost as little as one-third the price of brand-names.

Several blockbuster brand-name drugs lost their patent exclusivity in 2006, generating competition. Notable examples include Flonase, an allergy medicine; Zocor, a medicine used to lower cholesterol; and Zoloft, which is used to treat depression.

Federal officials said safety concerns also probably influenced spending on medicine. The Food and Drug Administration issued more of its most serious warnings than in previous years — 68 in 2007 versus 58 the year before and 21 in 2003.

Another aspect of the overall spending slowdown came from a decrease in administrative expenses associated with the new Medicare drug benefit. The program kicked in during 2006, generating a substantial uptick in administrative expenses.

Officials emphasized that the good news about slowing the increasing costs of health care extended only to prescription drugs. All other major health sectors — such as hospitals, physicians, nursing homes and home health — grew at the same rate or slightly faster than the year before.

Among the major components of the health industry, officials found:

Hospital spending, which makes up nearly one-third of all health spending, increased 7.3 percent. In the 1990s, spending on hospital services grew at a 5.2 percent rate, thanks in part to more tightly managed care from insurers.

Spending for physicians and clinical services grew 6.5 percent, the same rate as the year before.

The cost of nursing home care increased 4.8 percent.

Spending for home health care increased by 11.3 percent.

Spending for private health insurance grew 6 percent, unchanged from the year before but much lower than in 2002 when it hit 10.7 percent.

The entire report appears in the journal Health Affairs.

Talk to us

More in Local News

Emergency responders surround an ultralight airplane that crashed Friday, Sept. 22, 2023, at the Arlington Municipal Airport in Arlington, Washington, resulting in the pilot's death. (Ryan Berry / The Herald)
Pilot dead in ultralight plane crash at Arlington Municipal Airport

There were no other injuries or fatalities reported, a city spokesperson said.

An example of the Malicious Women Co. products (left) vs. the Malicious Mermaid's products (right). (U.S. District Court in Florida)
Judge: Cheeky candle copycat must pay Snohomish company over $800K

The owner of the Malicious Women Co. doesn’t expect to receive any money from the Malicious Mermaid, a Florida-based copycat.

A grave marker for Blaze the horse. (Photo provided)
After Darrington woman’s horse died, she didn’t know what to do

Sidney Montooth boarded her horse Blaze. When he died, she was “a wreck” — and at a loss as to what to do with his remains.

A fatal accident the afternoon of Dec. 18 near Clinton ended with one of the cars involved bursting into flames. The driver of the fully engulfed car was outside of the vehicle by the time first responders arrived at the scene. (Whidbey News-Times/Submitted photo)
Driver sentenced in 2021 crash that killed Everett couple

Danielle Cruz, formerly of Lynnwood, gets 17½ years in prison. She was impaired by drugs when she caused the crash that killed Sharon Gamble and Kenneth Weikle.

A person walks out of the Everett Clinic on Thursday, Sept. 7, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
The Everett Clinic changing name to parent company Optum in 2024

The parent company says the name change will not affect quality of care for patients in Snohomish County.

Tirhas Tesfatsion (GoFundMe) 20210727
Lynnwood settles for $1.7 million after 2021 suicide at city jail

Jail staff reportedly committed 16 safety check violations before they found Tirhas Tesfatsion, 47, unresponsive in her cell.

In this photo posted to the Washington state Department of Ecology website and taken by the U.S. Coast Guard, people watch as emergency crews respond to the Walla Walla passenger ferry, which ran aground near Bainbridge Island west of Seattle, Saturday, April 15, 2023. (Lt. Cmdr. Brian Dykens/U.S. Coast Guard via AP)
Edmonds-Kingston shuffle: 64-car ferry replaces 202-car boat, for now

The system-wide boat swap stems from the vessel Walla Walla out of service for four weeks for repairs.

A person walks in the rain at the Port of Everett in Everett, Washington on Saturday, Sept. 23, 2023. (Annie Barker / The Herald)
First heavy rain event predicted Sunday night for Snohomish County

Starting Sunday evening, 1 to 1½ inches of rain is expected in western Washington. It marks the end of fire season, meteorologists said.

Logo for news use featuring Whidbey Island in Island County, Washington. 220118
Clinton man, 61, dies in motorcycle crash Friday

Washington State Patrol lists speed as the cause. No other people or vehicles were involved.

Most Read