U.S. Health Outlays Rise To $1.7 Trillion

U.S. health care costs continue to soar, and consumers, employers and insurers continue to disagree about the best way to respond.[@@]

A federal agency, a group of private researchers and 2 consulting firms painted that picture today with a barrage of survey reports.

The Office of the Actuary at the Centers for Medicare & Medicaid Services set the tone with a report showing that overall U.S. health spending grew “only” 7.7% in 2003, to $1.7 trillion, or an average of $5,670 per U.S. resident.

The growth rate was down from 9.3% in 2002, but CMS officials note that most of the slowdown was the result of successful efforts to hold down increases in spending on Medicaid, children’s health insurance programs and other government health programs to 6.6%.

Private health expenditures grew 8.6%.

Although the growth rate in private health insurance premiums fell to 9.3%, from 10.7%, consumers watched growth in out-of-pocket spending accelerate to 7.6%, from 6%.

The Bush administration and private health insurers have talked about controlling health cost inflation by limiting medical malpractice suits and encouraging use of high-deductible health insurance in conjunction with the new health savings accounts.

But researchers from the Henry J. Kaiser Family Foundation, Menlo Park, Calif., and Harvard University today published survey results that suggest that voters have only a moderate level of interest in health care costs this year and far less interest in seeing the country try to hold down cost increases by making consumers more responsible for seeking lower-cost doctors and services.

When the researchers surveyed 1,396 U.S. adults in November 2004, they found that only 10% identified health care as the single most important issue President Bush and Congress should deal with in 2005. Health care and “terrorism/national security” tied for third place on the list. The most frequently mentioned issue was the war in Iraq, with the support of 27% of the survey participants. The second most frequently mentioned issue was the economy, which was cited by 17% of the survey participants.

Researchers also asked the survey participants to rate the importance of 7 possible perceived reasons for rising health care costs.

The “number of malpractice lawsuits” ranked second, with the support of 22% of the survey participants, but “high profits made by drug insurance companies” ranked first, with the support of 29% of the participants.

Only 4% of the participants agreed that a lack of incentives for patients to look for lower-cost doctors and services is the most important factor. Lack of patient incentives ranked below factors such as the aging of the population and “doctors making too much money.”