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Health care spending in Minnesota rose to $35 billion in 2008

Health care spending in Minnesota rose from $33 billion in 2007 to $35 billion in 2008, according to a new report by the Health Economics Program at the Minnesota Department of Health (MDH). The report projects that health care spending in the state would have doubled in the next 10 years without Minnesota's 2008 health reform law.

The report compares projected spending and estimated actual spending to determine the level of savings over time as Minnesota implements its 2008 health reforms, which aim to significantly slow the growth of health care spending.

While health care spending in Minnesota grew by 5.7 percent in 2008, it is lower than the 7.1 percent growth rate in 2007, but higher than the 4.4 percent growth rate in U.S. health care spending for 2008. Health care spending in Minnesota is projected to grow at an average annual rate of 7.1 percent between 2008 and 2018.

Despite the recent faster growth in health care spending, Minnesota continues to spend less on health care per person than the country as a whole. In 2008, per person spending in Minnesota was $6,720, compared to $7,166 nationally.

MDH performed the analysis for the first time in 2010 for health care spending in 2008, and the report establishes a baseline and methodology for the comparisons that measure the future impact of Minnesota's health reform law.

The report is part of Minnesota's health reform law enacted in 2008. The law includes provisions such as provider peer grouping, which offers information to consumers to help them choose high-quality, low-cost providers, and health care homes, which encourage care coordination for Minnesotans with chronic or complex conditions.

"Our approach to health reform in Minnesota includes payment reform, care redesign, market transparency, and public health efforts so that we can work to improve health and increase value by achieving better quality at lower cost," said Minnesota Commissioner of Health Dr. Sanne Magnan. "This part of the 2008 law will allow us to track health care cost savings as we implement health reform."

The comparison of actual to projected spending did not yield savings for 2008, primarily because many of the provisions of Minnesota's health reforms had not taken place.

This report is available online at