| Subject: Health Care Costs More, But People Buy More |
Author:
Betty
|
[
Next Thread |
Previous Thread |
Next Message |
Previous Message
]
Date Posted: 11:54:16 06/21/05 Tue
Inflation in U.S. medical care spending inches near double digits, according to a study by the Center for Studying Health System Change. The 8.2% increase in spending, while slower than it has been in recent years, still far outstrips spending in other areas.
The increase in the rate of health care spending, calculated by the HSC, is also twice the rate of health care inflation as measured by the U.S. government. This means that much of the increase in health spending is a result of increased utilization, which has occurred despite higher prices and cutbacks in insurance.
Health care spending continued to outpace prices in other areas, even as the increase was slower than in recent years. The annual change per capita in health care spending for 2004 was 8.2%, the HSC says. That rate of increase is less than it was in 2001, when it peaked at 11.3%, or in 2002, when it hit 10.7%. But health care spending still outpaced gross domestic product growth, which was at 5.6%.
"If health care spending continues to grow at a significantly faster rate than workers' incomes--and there's every sign that it will--health insurance will become unaffordable to more and more people," said Paul Ginsburg, president of HSC and a co-author of the study published in Health Affairs.
Ginsburg's statement is borne out by data showing an increase in the number of uninsured. Even though the number of people in the U.S. with health insurance coverage increased by 1 million in 2003, the percentage of the population without health insurance and the number of uninsured both rose, according to the Census Bureau. As of 2003, 45 million people, or 15.6% of the population, were uninsured, up from 43.6 million, or 15.2%, in 2002.
The percentage and number of people covered by employer-based health insurance also fell. In 2003, 174 million Americans (60.4% of the population) were employer-insured, down from 175.3 million (61.3%) in 2002. Meanwhile, many companies have added co-payments, increased deductibles, or, like General Motors (nyse: GM - news - people ), begun the contentious process of cutting back on the level of benefits offered. And the percentage and number of people covered by government health insurance programs increased.
Spending rose by at least 6.2% in every subcategory. Hospital outpatient spending led the charge, rising by 11.2%. The slowest growth category was hospital inpatient spending, which rose by 6.2%.
Prescription drug spending grew by 7.2%. While that boost is still substantial, it is far less than the increase in prescription drug spending seen just a few years ago. Between 1998 and 2002, prescription drug spending growth averaged 14.2%. The relative slowdown has coincided with a sharp drop in the share price of drug giants Merck and Pfizer. Health insurers like UnitedHealth Group, WellPoint Health Networks and WellChoice have seen their share prices rise dramatically in recent years.
Health care inflation has outpaced inflation in other areas. In the most recent 12-month period, prices for health care rose by 4.3%, compared with 2.8% for prices overall, according to the U.S. Bureau of Labor Statistics. But a lot of the rise in spending is due to increased consumption.
Overall spending on hospital services rose by 10.1% in 2004, the HSC study reports. Prices rose by 7.0%, but that did not stop Americans from demanding 2.9% more in services. For prescription drugs, prices rose by 3.3%, just slightly faster than inflation overall. The quantity purchased increased by 3.8%.
The trend toward "patient cost sharing" via higher deductibles and co-payments has continued, but it too has slowed compared with recent years, the HSC study says. In private sector plans, employees are paying 18% of the cost of single coverage and 22% of the cost of family coverage--levels that have been unchanged for several years.
The study notes, "The question of when purchasers of health insurance might expect to see some relief from rapidly rising health care costs and insurance premiums has become a perennial one." The answer may be never, if higher costs continue to have little deterrent effect on consumption.
[
Next Thread |
Previous Thread |
Next Message |
Previous Message
]
| |
Feedback: 