Trillions? Trillions! CMS Actuary Projects 2013 Spending at $2.9T

Health spending growth remained slow in 2013, with faster growth on the horizon due to the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) coverage expansion, economic growth and an aging population according to the CMS Office of the Actuary in a report published by Health Affairs on September 3, 2014. Sequestration, sluggish economic recovery and increases in private health insurance cost-sharing requirements attributed to the slow growth of 3.6 percent for health spending in 2013. Overall, in 2013 health care expenditures sponsored or paid for by the government (federal, state, and local) are expected to have reached $1.3 trillion, which is a 3.2 percent growth, as compared to 3.9 percent growth, or $1.6 trillion seen in spending by business, households and private sources.

Despite the slow growth in 2013, during the study’s full projection period of 2013 to 2023, national health expenditures are projected to increase at an average rate of 5.8 percent a year, which is 1.1 percentage point greater than the average annual growth rate in nominal gross domestic product. This is still slower than the growth rate from 1990 to 2008, which grew 2.0 percentage points faster than the gross domestic product growth. The 2023 projection for government financed health care costs is $2.5 trillion.

In 2013 Medicare spending growth slowed, decelerating from 4.8 percent to 3.3 percent. This is attributed to budget sequestration requirements and other payment adjustments. Growth in spending is projected to increase in 2014, due in large part to the additional nine million Americans who gained insurance through private health insurance plans and Medicaid. Looking ahead to 2015, the national health spending growth is expected to slow to 4.9 percent, due to “significant decelerations in Medicare and Medicaid spending.” Reduced payments to Medicare Advantage, or Medicare Part C plans, will contribute to the deceleration.

Total hospital spending growth is expected to slow from 4.9 percent in 2012 to 4.1 percent in 2013, which equals $918.8 billion. More drastically, Medicare hospital spending has slowed from 4.5 percent to 2.5 percent over the same time frame. The ACA has led to increased use of hospital services which should result in growth acceleration of 4.5 percent in 2014.

Wolters Kluwer Holiday

We will not be posting today in commemoration of Labor Day. We’ll be back to our regular schedule tomorrow, Tuesday, September 2nd.

Zarbee’s Admonished by the FDA; Facebook and Twitter Testimonials Cited

Zarbee’s Naturals, the manufacturer of numerous over-the-counter remedies aimed at relieving coughs, colds, allergies and sleeplessness was issued a warning letter by the Food and Drug Administration for making therapeutic claims which would cause their products to be classified as drugs under the federal Food, Drug, and Cosmetic Act. Zarbee’s products, described by the company as “natural relief,” have not been approved by the FDA

The FDA identified the following products in its warning letter:

  • Zarbee’s Naturals Children’s Cough Syrup+Mucus Relief
  •  Zarbee’s Naturals Children’s Cough Syrup
  • Zarbee’s Naturals Children’s Cough Syrup Nighttime
  • Zarbee’s Naturals Seasonal Relief
  • Zarbee’s Naturals Sleep
  • Zarbee’s Naturals Children’s Sleep

The FDA noted that claims made by the company indicate the products are intended for use as drugs, such as the statement that Zarbee’s Naturals Seasonal Relief 10 Count is “clinically supported to work fast and offer congestion relief so you can breathe better in every season.” The FDA also took issue with Twitter testimonials, both in the form of original tweets from Zarbees and “retweets” or sharing tweets of others endorsing the products.

The FDA warning letter also stated that Zarbee’s had numerous posts indicating their products were intended for use as drugs, and that the company “liked” and responded to Facebook testimonials by consumers recommending products for use as drugs. The agency also warned that three of Zarbee’s products are considered misbranded.

“Furthermore, your products “Zarbee’s Naturals Children’s Cough Syrup+Mucus Relief,” “Zarbee’s Naturals Children’s Cough Syrup Nighttime,” and “Zarbee’s Naturals Children’s Sleep” are offered for conditions that are not amenable to self-diagnosis and treatment by individuals who are not medical practitioners; therefore, adequate directions for use cannot be written so that a layperson can use these drugs safely for their intended purposes.”

Noting that the warning letter was not meant as an all-inclusive list of deficiencies, the company was given 15 days to respond to the FDA. The warning letter was dated June 27, 2014. Zarbee’s spokesperson did not respond to Wolters Kluwer’s request for comment.


Independence Day

We will return Monday, July 7 with our regular posting schedule.