Healthcare Costs Soar 6.9 Percent
Washington
Healthcare spending increased 6.9 percent in 2000, the highest annual increase since 1993, the U.S. 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 increase liabilities, add to the system's costs, and make the situation even worse.
Specifically, the HHS report said that U.S. healthcare spending 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 attributed the increase primarily to economy-wide inflation.
However, one element continued to stand out–drug costs. 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 said that healthcare spending increased to 13.2 percent of GDP, compared to 13.1 percent in 1999.
Karen Ignagni, president of the Washington-based American Association of Health Plans, said that the increase in healthcare spending should encourage Washington to reexamine its approach to healthcare reform. “It is time to reject the failed argument that costly new lawsuits and more regulation will improve the healthcare 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 healthcare costs.
“Unfortunately, the past five years have seen more than their share of political scape-goating, and attempts to litigate and regulate 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 serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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