According to last year’s Institute of Medicine Report on sleep disorders, an estimated 50 to 70 million Americans chronically suffer from disorders of sleep and wakefulness that have been associated with a wide range of health consequences (hypertension, diabetes, obesity, depression, heart attack, and stroke) linked to the rapidly increasing cost of public health care. Controlling those costs will continue to be a major public policy focus, as new government data shows. In its latest report, the federal Office of the Actuary expects 20 cents of every dollar spent to go to health care by 2016. The annual forecast by a division of the Centers for Medicare and Medicaid Services (CMS) predicts a 10-year increase from $2.1 trillion to $4 trillion for spending on health care in the United States. This represents an increase in the percentage of the gross domestic product from 16% to nearly 20% over the same period.

A near doubling of health spending will be the result of a steady increase of 6.9% per year in overall health-care costs during the decade, the Office of the Actuary’s analysts reported in Health Affairs. Minor changes in this rate may occur, including a decrease of 0.1% in the rate of spending growth for the past year. CMS says that ongoing increases in health costs are being slowed by the Medicare drug benefit, reduced Medicaid growth, and slow growth in private health insurance. The impact of any proposed health reforms, such as extending federal or state coverage to more of the uninsured, was not considered in the compilation of the CMS predictions.

Out-of-pocket health spending by US consumers is expected to reach nearly $441 billion by 2016, up from almost $251 billion in 2006. The percentage of personal health care paid for out of pocket, however, is likely to fall from 27.3% today to 25% in 2016, the analysts say. The National Health Statistics Group at CMS says that the most dramatic cost changes now being seen in health care are the payment-distribution shifts shown by private insurance, Medicaid, and Medicare (particularly part D).

Despite the reductions in Medicare spending that will result from the reduced payments to physicians and managed-care plans that have already been enacted, spending by the program will more than double, from about $418 billion now to nearly $863 billion in 2016. Medicaid spending is expected to grow at a rate of 8.1% per year, despite a drop in Medicaid drug spending of 36% for 2006 because of enrollment in Medicare part D by beneficiaries with dual eligibility. The spending rate for prescription drugs as a whole is predicted to be an average 8.6% per year, with the savings gained by increasing reliance on generic medications to be offset by the advent of new drugs to treat cancer and other major diseases.

An average annual growth rate of 7% for hospital care is expected following a rebound in both public and private spending. The 2016 bill for hospital care is predicted to be $1.2 trillion.

Physician services will cost about $820 billion in 2016, the report says, but will grow at a slower average annual rate (4.5%) than that for most other health services. Nursing homes will also see slower cost growth, at an annual average rate of 5.5%. Home health will be among the fastest-growing expense categories, now at 12.5% per year but slowing to 7.6% per year by 2016, when it will account for $111 billion in costs.

The report did not address the impact of greater use of preventive medicine, such as treating sleep disorders. However, with rapidly rising health care expenditures, all methods of controlling costs are likely to become more important in the future.