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Dental spending growth resumes

January 10, 2012

By Craig Palmer

Washington—The dental economy gained traction in 2010 as patient out-of-pocket spending rebounded from a sharp recessionary decline, analysts reported Jan. 9 in the government’s annual snapshot of national health spending.

Total dental spending increased by 2.3 percent to $104.8 billion after holding steady at just over $102 billion during 2008 and 2009. Some 4 percent of the nation’s health care dollar paid for dental services in 2010. Growth in total health spending continued in 2009-2010 but at sluggish rates.

All health spending felt the brake of recession, which officially ended in 2009. Households, businesses and state and local governments financed a smaller share of the health care bill as the federal government picked up a larger share during and just after the recession, the National Health Expenditure Accounts Team reported.

"The slow growth in health spending in 2009 and 2010 was influenced by slower growth in the use of health care goods and services as consumers remained cautious about their spending — in part because of losses in private health insurance coverage, lower median household income and future financial uncertainty," said the report prepared by the Centers for Medicare & Medicaid Services Office of the Actuary from the National Health Accounts and described in the journal Health Affairs.

However, patient out-of-pocket spending for dental and physician/clinical services accelerated in 2010, reversing 2009 declines of 5.2 percent in out-of-pocket dental and 1.9 percent physician/clinic spending. Although total out-of-pocket consumer spending increased by 1.8 percent in 2010, prescription drug spending declined.

"Faster growth in 2010 partially reflects higher cost-sharing requirements for some employees, consumers’ switching to plans with lower premiums and higher deductibles or copayments or both and the continued loss of health insurance coverage and resulting in higher out-of-pocket spending," the report said.

Economic recessions tend to have a lagged impact on health spending but the slowdown in health spending growth from the recent recession occurred more quickly than was the case in previous recessions, the NHE team said. Health spending grew more slowly in 2009 and 2010 than in any other years during the 51-year history of the National Health Expenditure Accounts. Declines in dental spending and in out-of-pocket spending for dental services from 2008 to 2009 were the first reported since the accounting began.