Health care spending rate slows
Published 9:00 pm Tuesday, June 8, 2004
NEW YORK – The rate of growth in health care spending fell for the second year in a row in 2003 as demand for health services dropped because workers were forced to pick up more of the tab for their care and a surge from a change in managed care policies ebbed.
However, experts said costs are still outpacing inflation and remain a grave concern as more people can’t afford health care.
Health care spending per privately insured person increased 7.4 percent last year, down from a 9.5 percent rise in 2002 and 10 percent gain in 2001, according to a report being released Wednesday by the Center for Studying Health System Change, a public policy research organization in Washington D.C.
The growth rate is still historically high. The inflation rate in 2003 was 1.9 percent. And the gap between the rise in health spending and Gross Domestic Product, which was 3.8 percent last year, widened to 3.6 percent percentage points, compared with a 30-year average of 2.5 percentage points.
“The bad news is this is still a high rate of increase, and the fact that it is lower than last year doesn’t mean it has gotten easier to find affordable health care,” said Paul Ginsburg, the center’s president.
The cost shifting was most prevalent in prescription drug plans, Ginsburg said.
More health insurers instituting three-tiered drug plans which force employees to pay more for brand name drugs, making cheaper generic medicines more popular. That’s a major reason pharmaceutical spending rose 9.1 percent, down from the 12.3 percent rise in 2002.
According to pharmacy benefit manager Express Scripts Inc., the average price of a prescription drug before discounts rose 7.9 percent last year, down from a 13.1 percent spike a year earlier. The company cited increased use of generic drugs.
The Center for Studying Health System Change study also said that drug price inflation shrank to 3.1 percent last year, down from just over 5 percent a year earlier.
Spending on hospital outpatient centers rose 11 percent – the largest jump in the study.
