The healthcare expenditure of Americans is increasing at a rate that is outpacing overall economic growth by nearly 3 percentage points. Although the figure is more than previous years, it is still the lowest annual increase seen in seven years. These findings were made by a group of researchers from the National Health Statistics Group which also runs Medicare and Medicaid.
The report published in the latest issue of Health Affairs, puts US healthcare spending at 1.7 trillion in 2003, up 7.7 percent from last year. It emphasizes that the slowdown in the rate of increase compared to previous years was largely due to tightening of Medicaid budgets. Medicaid cost had risen to $267 billion, marking an increase of 7.1 percent and also a deceleration in spending from previous years.
Both the programs Medicare and Medicaid had pushed spending curbs by limiting eligibility and restricting benefits to the poor and disabled and reducing hospital and nursing home payments for some services. These curbs were not likely to show up in 2004 because last year the economy was in a far better shape and the agencies felt little need to rein in payments. The 9/11 incident had led to a recession which in turn caused many states to face budget shortfalls in 2003.
The report also points to a decline in spending growth in the private sector. In 2002, this sector had marked a 9 percent growth whereas in 2003 it rose to 8.6 percent to $913.2 billion. A large portion of the total US healthcare spending was contributed by private payments for insurance premiums, prescription drugs, doctor services, etc.
The report revealed a rather interesting aspect to the health care spending. Patients had spent nearly a quarter their own healthcare dollar which suggested that there were a large number of Americans without health insurance. It also reflected increasing pressure from employers to workers to pay more for coverage.
The slowdown in the gross healthcare figure was also marked by slower insurance premium growth. Growth in the number of insurance buyers also fell nearly 1 percent.
A member of the research team was asked whether the improved employment scenario in 2003 did not factor in the slower growth. “The effect of the improved employment conditions on healthcare spending was barely negligible because much of the recovery in job growth was noticed in sectors where the employers traditionally did not offer health insurance.”
If a lay person were to read between the lines and statistics of the report, s/he would assume one of two things: either Americans are getting healthier or there is an increase in the number of people who do not have health insurance.
