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Health Care Spending Rose 6.9% In 2000, Biggest Jump Since '93

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Health Care Spending Rose 6.9% In 2000, Biggest Jump Since ’93



Health care spending climbed 6.9% in 2000, the highest annual increase since 1993, the Department of Health and Human Services reports.

The report prompted calls from health insurance representatives for Congress to stop pursuing legislative initiatives that they say would only serve to make the situation worse.

Specifically, the HHS report says health care spending in the U.S. rose to $1.3 trillion in 2000, or an average of $4,637 per person.

This compares with slightly more than $1.2 trillion, or an average of $4,377 per person, in 1999.

HHS attributes the increase primarily to economy-wide inflation.

Prescription drug spending led the pace of growth in 2000, HHS says, although the growth rate eased a little from 1999. Drug spending increased by 17.3% in 2000 to $121.8 billion, compared to a 19.2% increase to $103.9 billion in 1999.

In terms of gross domestic product, HHS says health care spending increased to 13.2% of GDP, compared to 13.1% in 1999.

Karen Ignagni, president of the American Association of Health Plans, says the rise in health care spending should encourage Washington to reexamine its approach to health care reform.

“It is time to reject the failed argument that costly new lawsuits and more regulation will improve the health care system for those who can hardly afford it today,” she says.

The managed care industry, according to Ignagni, has played a significant role in holding down health care costs.

“Unfortunately, the past five years has seen more than its share of political scape-goating, and attempts to litigate and regulate our way to better health care,” she says. “There is a price for this approach, and consumers are paying it, dearly.”

Reproduced from National Underwriter Life & Health/Financial Services Edition, January 14, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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