Healthcare Costs Soar 6.9 Percent

Washington

Healthcare spending increased 6.9 percent in 2000, the highestannual increase since 1993, the U.S. Department of Health and HumanServices reports.

The report prompted calls from health insurance representativesfor Congress to stop pursuing legislative initiatives that they saywould increase liabilities, add to the system's costs, and make thesituation even worse.

Specifically, the HHS report said that U.S. healthcare spendingrose 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 averageof $4,377 per person, in 1999.

HHS attributed the increase primarily to economy-wideinflation.

However, one element continued to stand out–drug costs. HHS saidthat prescription drug spending led the pace of growth in 2000,although the growth rate eased a little from 1999. Drug spendingincreased by 17.3 percent in 2000 to $121.8 billion, HHS reports,compared to a 19.2 percent increase to $103.9 billion in 1999.

In terms of gross domestic product, HHS said that healthcarespending increased to 13.2 percent of GDP, compared to 13.1 percentin 1999.

Karen Ignagni, president of the Washington-based AmericanAssociation of Health Plans, said that the increase in healthcarespending should encourage Washington to reexamine its approach tohealthcare reform. “It is time to reject the failed argument thatcostly new lawsuits and more regulation will improve the healthcaresystem for those who can hardly afford it today,” she said.

The managed care industry, Ms. Ignagni said, has played asignificant role in holding down healthcare costs.

“Unfortunately, the past five years have seen more than theirshare of political scape-goating, and attempts to litigate andregulate our way to better healthcare,” according to Ms. Ignagni.“There is a price for this approach, and consumers are paying it,dearly.”

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, January 21, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.

Contact Webmaster