The rate of increase in health care spending slowed to its lowest pace in a decade, falling to 6.1 percent annual growth in 2007, down from 6.8 percent in 2006. That was just 1.3 percentage points faster than the economy as a whole.

In inflation-adjusted dollars, health care spending rose at a 3.3 percent clip compared to 2.0 percent for overall gross domestic product. That differential means 'slower' growth translated into health care's share of the overall economy rising to 16.2 percent of GDP, up from 16 percent in 2006.

Given that the overall economy fell into recession in 2008 while health care spending continued on its merry way, this is probably the last good news on health care spending that the rest of the economy will get in a while. "I wouldn't expect the 6.1 percent to stay that low," said Richard Foster, the chief actuary at the Center for Medicare and Medicaid Services (CMS), which compiles the numbers. CMS will release projections for the 2008 to 2017 period in a few weeks.

Most of the moderating growth came from slower increases in retail spending on prescription drugs and falling insurance company overhead. Prescription drug spending rose slightly less than 5 percent in 2007, about the same pace as the overall economy. That was down from the more usual 8.6 percent increase the year before.

The analysts cited a rise in the number of generic prescriptions as a large number of blockbusters came off patent. There was also an increase in the number of black box warnings issued by the more safety-conscious Food and Drug Administration (68 in 2007 compared to 21 just two years earlier). That may have helped hold down the growth in overall prescription drug use.

The net cost of insurance (that includes both profits and overhead), meanwhile, fell to just a 3.6 percent annual growth rate in 2007, which was significantly slower than the economy as a whole. The prior year, it grew 8.4 percent and since the beginning of this decade has grown every year somewhere between 7.6 and 12 percent. The analysts suggested the insurance underwriting cycle, where profits fall as more companies enter the market (think about the explosive growth in drug plans in 2006 and 2007 as the Medicare drug benefit became fully operational), was probably at work and probably wouldn't last long.

But the good news on drugs and insurance were offset by faster increases in spending at hospitals and on physician services, which expanded at slightly higher rates than health care spending as a whole. Hospitals increases were due to higher volumes, according to the CMS analysts, while physician increases were triggered by higher prices.

Those numbers suggest that efforts to control health care costs have yet to take on the most crucial targets. Hospitals and physicians account for well over half of all health care spending. Drugs and insurance company profits and overhead, on the other hand, account for less than one dollar in five.

On the payer side, the shift from private to public spending continued, with all federal, state and local health care expenditures (Medicare, Medicaid, government workers health care, public health activities, etc.) reaching 40.4 percent of the total. This does not include the foregone tax revenues from private spending, which would push it closer to half.

Among private payers, private householders have emerged as the largest single financier of our out-of-control health care system, largely due to higher co-pays, deductibles and other out-of-pocket expenses. Individuals and families now finance 31 percent of total health care spending compared to just 25 percent for businesses.

Those who wanted consumers to have "more skin in the game" to hold down costs have gotten what they wanted. The effect -- health care spending still growing at a rate over 50 percent faster than the rest of the economy -- was less than advertised.