Health Care Spending Takes Big Jump

By Steven Brostoff, Washington Editor

NU Online News Service, Jan. 10 11:23 a.m. EST?Health care spending increased 6.9 percent in 2000, the highest annual increase since 1993, the Department of Health and Human Services reported.

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 even worse.

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

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

HHS attributed the increase primarily to economy-wide inflation.

HHS said that prescription drug spending led the pace of growth in 2000, although the growth rate eased a little from 1999.

Drug spending increased 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 says that health care spending increased to 13.2 percent of GDP, compared to 13.1 percent in 1999.

Karen Ignagni, president of the American Association of Health Plans, said the increase 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 said.

The managed care industry, Ms. Ignagni said, 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,” Ms. Ignagni said.

“There is a price for this approach, and consumers are paying it, dearly,” she said.