U.S. Rise in Health Care Spending Slowed in 2004

Smallest increase since 2000 due to slowdown in prescription drug spending

TUESDAY, Jan. 10 (HealthDay News) -- Health care spending in the United States grew by 7.9% in 2004 to $1.9 trillion, the smallest increase since 2000, according to a study in the January/February issue Health Affairs. The increase, smaller than the 8.2% rise in 2003, was due mainly to a slowdown in prescription drug spending, the authors say.

Cynthia Smith, an economist from the Centers for Medicare and Medicaid Services in Baltimore, and colleagues analyzed recent data from the U.S. Census Bureau and other sources, including investment estimates for medical equipment and software.

While new medical treatments, rising prices and growing utilization keep driving health care costs up, the researchers found that U.S. health care spending grew 7.9% in 2004 to about $6,280 per person. Health care spending made up 16% of the gross domestic product (GDP) in 2004, similar to the percentage in 2003. That percentage was 9.1% in 1980 and 13.8% in 1993. Spending on prescription drugs rose 8.2%, about half the increase seen five years ago.

Still, health care cost increasingly burdens the least affluent. "Medical progress has improved health care for many families, but rising costs are also a growing burden for households, businesses and governments," the authors write. "Medical spending continues to rise faster than wages and faster than economic growth, and workers are paying much more for health care premiums than just a few years ago."

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