A Medical Device Daily

The growth in healthcare spending in the U.S. slowed for the second straight year in 2004, according to a report released this week by the Centers for Medicare & Medicaid Services (CMS; Baltimore). CMS said that 2004 spending rose 7.9%, as compared to 8.2% growth in 2003 and 9.1% growth in 2002.

The report, issued annually by CMS's Office of the Actuary, was published in the journal Health Affairs. It describes healthcare spending of $1.9 trillion in 2004 – $6,280 per person.

The share of the nation's gross domestic product (GDP) spent on healthcare grew 0.1 percentage point to 16% in 2004, an increase smaller than that experienced in recent years as economic growth in 2004 grew at its fastest rate since 1989.

"While the growth rate is declining, the cost of healthcare continues to be a concern for government, business, individuals and families," HHS Secretary Mike Leavitt said. "We must build on steps already taken – the new Medicare prescription drug benefit, advancing health information technology and encouraging a prevention-oriented society – to find innovative, market-based ways to control costs."

"As we move forward, the new Medicare law and the new prescription drug coverage will help even more to keep costs in line while improving quality," said CMS Administrator Mark McClellan, MD, PhD.

The report highlights a shift in growth between hospital and prescription drug spending. In the mid-to-late 1990s, managed care, coupled with the effects of the 1997 Balanced Budget Act, suppressed hospital spending growth.

In 2004, prescription drugs accounted for only 11% of the growth in national healthcare expenditures, smaller than its share of the increase in recent years, and the rate of growth in prescription drug spending – at 8.2% in 2004 – is slower in absolute terms than previously.

Other highlights from the report:

• Prescription drug spending had accounted for 23% of the growth in personal health spending between 1997 and 2000, but by 2002-2004 it accounted for only 14%.

• Hospital spending accounted for 28% of the growth in personal health spending between 1997 and 2000 and increased to 38% by 2002-2004.

• Physician services accounted for 29% of the growth in personal health spending in 2004, up from an average 25% share in 2000-2002.

• Out-of-pocket payments grew 5.5% in 2004, slower than aggregate health spending growth and slower than private insurance premiums, both in aggregate and on a per-enrollee basis.

• Federal, state and local government healthcare spending rose 8.2% in 2004. Public spending continues to be dominated by Medicare ($309 billion in 2004), whose growth rebounded in 2004, CMS said, "in part due to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 that raised payments for physicians, capitated health plans, and rural and other providers."

• Medicaid spending reached $291 billion in 2004, 15% of national health spending. In contrast, Medicaid spending growth decelerated from 8.8% in 2003 to 7.9% in 2004, reflecting cost-containment efforts, CMS said.

• Hospital spending, nearly one-third of total national health expenditures, increased 8.6% in 2004. The '04 growth in hospital spending accounted for 33% of the overall increase, greater than its 30% share of aggregate spending.

• Spending for physician services grew 9% percent in 2004, nearly the same as the 8.6% increase in 2003.

• Spending for freestanding home health agencies rose more rapidly than any other service category, increasing 13.3% in 2004. Public spending rose 17.6% for home health services, accounting for 74% of such spending.

SEC sets up interactive reporting study

The Securities and Exchange Commission (SEC) this week said that SEC staff will offer expedited reviews of registration statements and annual reports to companies that volunteer for a test group as part of an interactive data initiative intended to promote easier access and analysis. accessed and analyzed.

Christopher Cox, SEC chairman, said, "The best way for filers to understand how interactive data works is to participate in the voluntary program. The filers will have an opportunity to share with the SEC their individual experiences with preparing, making and analyzing their interactive filings. They will also better understand how interactive data can help streamline their financial reporting process."

In April 2005, the commission began a voluntary program for receiving financial information using eXtensible Business Reporting Language (XBRL). This program allows for the voluntary submission of XBRL documents as exhibits to periodic reports from corporate issuers and Investment Company Act reports.

Companies that participate in the voluntary program's new test group will furnish financial data contained in their periodic and investment company reports in XBRL format for at least one year and provide feedback on their experiences, including the costs and benefits associated with reporting in the interactive data format.

Companies interested in participating in the test group should contact Jeffrey Naumann in the Office of the Chief Accountant, naumannj@sec.gov or Brigitte Lippmann in the Division of Corporation Finance, lippmannb@sec.gov, by Feb. 10, for more information. The group is expected to be established later in the month.

Elekta lauds CMS payment increase

Effective Jan. 1, payment for Gamma Knife surgery under the Hospital Outpatient Prospective Payment system was increased by 28% as compared to 2005 reimbursement rates for 2005.

Elekta (Stockholm, Sweden), manufacturer of the Leksell Gamma Knife, said that the payment increase acknowledges " the data presented by peer study groups at the Gamma Knife users meeting ... regarding the appropriate billing and payments for cobalt 60 based radiosurgery, by establishing payment coding for the procedure [HCPCS G0243] under a clinical APC [APC 0127]."

Elekta reports that the Gamma Knife is being used in more than 100 U.S. facilities and more than 220 hospitals worldwide, with more than 350,000 patients treated "with an ever-growing number of indications."