Karen Ignagni, president and CEO of America's Health Insurance Plans (AHIP),says new federal analysis confirms that rising costs for medicalservices, not health plan administration, is a huge driver for thesurge in national health spending.

The Centers for Medicare & Medicaid Services (CMS) releaseddata this week showing health care's share of the economy grew 1.1percentage points in 2009 - the largest one-year increase in GDPshare since the federal government began keeping track in 1960.

Expenses for health care in the U.S. now accounts for 17.3percent of GDP, and is expected to rise.

"Rising health care costs are crushing our economy and adding aburden on working families and employers across the country,"Ignagni said in a statement. "The new CMS data confirm that risinghealth care costs are driven by increases in underlying medicalcosts, not health plan administrative costs."

AHIP has pleaded to members of Congress, urging attention bepaid to the cost of health care services rising at alarming rates.At the same time, Ignagni points out in a December letter to Congressman Joseph Crowley, D-N.Y., planadministrative costs are rising at far lower rates than the cost ofcare.

"Without a national, long-term strategy to address the rapidgrowth in underlying medical costs, health care spending willcontinue to grow far faster than the economy as a whole, crowdingout other important domestic priorities, such as education, energy,and deficit reduction," Ignagni said in her latest statement.

AHIP notes three key findings taken from the latest CMSdata:

• Hospital spending growth is projected to have accelerated from4.5 percent in 2008 to 5.9 percent in 2009, as spending reached$760.6 billion.
• Spending growth for physician and clinical services is expectedto have accelerated to 6.3 percent in 2009, up from 5.0 percent in2008, with expenditures having reached $527.6 billion.
• Prescription drug spending is expected to have grown 5.2percent in 2009, an acceleration of 2.0 percentage points from2008, and to have reached $246.3 billion.