CBO Projects Health Care Costs Could Reach 49% of GDP by 2082

In a November 2007 CBO Study, "The Long-Term Outlook for Health Care Spending," the CBO suggested that, in the absence of changes in federal law:

• Total spending on health care would rise from 16 percent of gross domestic product (GDP) in 2007 to 25 percent in 2025, 37 percent in 2050, and 49 percent in 2082.


• Federal spending on Medicare (net of beneficiaries' premiums) and Medicaid would rise from 4 percent of GDP in 2007 to 7 percent in 2025, 12 percent in 2050, and 19 percent in 2082.
  

"In 2005, the most recent year for which data are available, national spending on health care totaled nearly $1.9 trillion, or 14.9 percent of the nation’s GDP. Some 55 percent of the total was financed privately, and the rest came from public sources (see Table 1). Payments by private health insurers were the largest component of private spending, accounting for 37 percent of national health expenditures. Consumers’ out-of-pocket expenses, which include payments for deductibles and copayments for services covered by insurance as well as payments for services not covered by insurance, accounted for 13 percent of national health expenditures. Other sources of private funds, from philanthropy and on-site clinics that some employers maintain for their workers, accounted for 4 percent of the total.

Federal spending on Medicare accounted for 18 percent of national health expenditures in 2005, while federal and state spending on Medicaid accounted for 17 percent. A variety of other public programs accounted for 10 percent of national health expenditures, including ones by state and local health departments, the Department of Veterans Affairs, and the Department of Defense; workers’ compensation programs; and the State Children’s Health Insurance Program."

Read CBO Study

Tennessee Supreme Court Holds Attorney-In-Fact Could Bind Resident To Arbitration Agreement

[Source: Health Lawyers Weekly, November 16, 2007 - AHLA]

A durable power of attorney for healthcare authorizes the attorney-in-fact to enter into an arbitration agreement on behalf of a resident as part of a nursing home’s admissions process, the Tennessee Supreme Court held November 8.

Thus, the appeals court upheld the pre-dispute arbitration agreement in so far as plaintiff argued the attorney-in-fact could not bind the principal and that the agreement was otherwise unenforceable or violated public policy.

The high court did remand for further proceedings, however, on whether the arbitration agreement was an unconscionable contract of adhesion. Continue Reading

Owens v. National Health Corp., No. M2005-01272-SC-R11-CV (Tenn. Nov. 8, 2007).

[Corrected Opinion]

Shareholders sue Sanofi-Aventis after FDA rejects diet drug

[Source: Health and Life Sciences Law Daily, November 16, 2007 - AHLA]

Fortune Magazine (11/16, Simons) reports, "The world's third-largest drug company, Sanofi-Aventis is facing a shareholder lawsuit for allegedly hyping a weight-loss pill that eventually failed to pass FDA muster." The class-action lawsuit alleges "that Sanofi's statements regarding anti-obesity drug, Zumulti, 'were materially false and misleading' because they 'concealed data concerning Zumulti's propensity to cause depression.'" The lawsuit "calls into question the expectations investors have regarding any yet-to-be-approved drug. Since 2004's Vioxx (rofecoxib) withdrawal, the FDA has been under pressure to be more safety-minded." However, some legal experts "contend that cases such as the one filed against Sanofi are difficult to prove." John Coffee, professor of law at Columbia Law School, said that in cases like this one, "plaintiffs need to prove there was an intent to defraud, not just woeful misjudgment."

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Jeanne Whalen, in WSJ Health Blog, discusses the FDA's concerns with Sanofi-Aventis’s diet pill: "Sanofi-Aventis’s weight-loss pill rimonabant ran into trouble with the FDA this summer over concerns about the pill’s psychiatric side effects, such as suicidal thinking. Now the drug, dissed by advisers to FDA but sold in Europe and Latin America, is getting knocked in an analysis that concludes it increases a person’s risk for depression and anxiety." Continue reading