Health care spending increases for 6th year

Healthcare Purchasing News, Feb, 2004

A 9.3 percent increase in 2002 in healthcare spending marked the sixth year of accelerating growth in U.S. health care expenditures, which now account for nearly 15 percent of the nation's gross domestic product. This is double the size of health care's share of the American economy 30 years ago. The increase is attributed to rising costs for hospitalization, physician services, home health care and prescription drugs.

The two reports appear in the journal Health Affairs and were written by researchers at the Centers for Medicare & Medicaid Services, an agency within the Department of Health and Human Services. The researchers charted health spending trends through 2002, the latest year for which complete data are available. In the United Sates, health care spending now averages $5,440 per person, roughly double the amount spent in European countries. Both per capita spending on health care and the portion of the U.S. economy that health care makes up have grown almost without interruption for 40 years. Efforts have not stopped the increases or cut spending. The last time the brakes were applied was in the early 1990s, ns a result of the managed care revolution when health care spending grew by only 5 percent in 1996, 5.1 percent in 1997 and 5.3 percent in 1998. In 2001, health care spending rose 8.5 percent over that in 2000; in 2002, it grew an additional 9.3 percent. By contrast, the GDP rose by 3.6 percent in 2002 over the previous year. In five years--1997 to 2002 the share of the total U.S. economy devoted to health care grew substantially, from 13.1 percent to 14.9 percent.